Year ended 31 July 2006
6. Taxation
| The tax charge for the year comprises: | 2006
£m |
2005 £m |
|---|---|---|
| Current year tax charge | 230 | 150 |
| Adjustments to tax charge in respect of prior years | (7) | (8) |
| Total current tax charge | 223 | 142 |
| Deferred tax charge: origination and reversal of temporary differences | 9 | 44 |
| Total tax charge | 232 | 186 |
| Tax on items charged to equity: | 2006
£m |
2005
£m |
|---|---|---|
| Current tax (charge)/credit on exchange movements offset in reserves | (7) | 25 |
| Deferred tax (charge)/credit on changes in the fair value of cash flow hedges | (4) | 3 |
| Deferred tax (charge)/credit on actuarial loss on retirement benefits | (2) | 2 |
| Deferred tax credit/(charge) on available-for-sale investments | 2 | - |
| Deferred tax (charge)/credit on share based payments | (2) | 4 |
| Total tax on items charged to equity | (13) | 34 |
| Tax reconciliation: | 2006
% |
2005
% |
|---|---|---|
| Statutory UK corporation tax rate | 30 | 30 |
| Prior year amounts | (1) | (1) |
| Non deductible and non-taxable items | (6) | (4) |
| Higher average tax rates in overseas companies | 5 | 3 |
| Effective current tax rate on profit on ordinary activities before tax (and the amortisation of intangibles) | 28 | 28 |
| The tax expense can be analysed as follows: | 2006
£m |
2005
£m |
|---|---|---|
| UK | 18 | 38 |
| Overseas | 205 | 104 |
| Current tax | 223 | 142 |
| UK | 4 | 7 |
| Overseas | 5 | 37 |
| Deferred tax | 9 | 44 |
