| All figures in £ millions | Notes | 2010 | 2009 |
|---|---|---|---|
| Current tax | |||
| Charge in respect of current year | (82) | (106) | |
| Other adjustments in respect of prior years | 13 | 7 | |
| Total current tax charge | (69) | (99) | |
| Deferred tax | |||
| In respect of temporary differences | (77) | (51) | |
| Other adjustments in respect of prior years | – | 4 | |
| Total deferred tax charge | 13 | (77) | (47) |
| Total tax charge | (146) | (146) |
The tax on the Group’s profit before tax differs from the theoretical amount that would arise using the UK tax rate as follows:
| All figures in £ millions | 2010 | 2009 |
|---|---|---|
| Profit before tax | 670 | 523 |
| Tax calculated at UK rate (2010: 28%, 2009: 28%) | (188) | (147) |
| Effect of overseas tax rates | (40) | (27) |
| Joint venture and associate income reported net of tax | 11 | 8 |
| Net income not subject to tax | 8 | 8 |
| Utilisation of previously unrecognised tax losses and credits | 56 | 2 |
| Unutilised tax losses | (6) | (1) |
| Prior year adjustments | 13 | 11 |
| Total tax charge | (146) | (146) |
| UK | (28) | (41) |
| Overseas | (118) | (105) |
| Total tax charge | (146) | (146) |
| Tax rate reflected in earnings | 21.8% | 27.9% |
A number of changes to the UK Corporation tax system were announced in the June 2010 Budget Statement. The Finance (No. 2) Act 2010 was enacted in July 2010 and reduces the main rate of corporation tax from 28% to 27% from 1 April 2011. A reduction in the rate of corporation tax from 28% to 27% resulted in a reduction in the net deferred tax asset provided at 31 December 2010 of £3m, of which £1m was charged to the income statement and £2m to other comprehensive income.
The tax rate reflected in adjusted earnings is calculated as follows:
| All figures in £ millions | 2010 | 2009 |
|---|---|---|
| Profit before tax | 670 | 523 |
| Adjustments: | ||
| Amortisation of acquired intangibles | 105 | 91 |
| Acquisition costs | 11 | – |
| Other net losses | (2) | – |
| Other net finance income | (12) | (2) |
| Adjusted profit before tax – continuing operations | 772 | 612 |
| Adjusted profit before tax – discontinued operations | 81 | 149 |
| Total adjusted profit before tax | 853 | 761 |
| Total tax charge | (146) | (146) |
| Adjustments: | ||
| Tax benefit on amortisation of acquired intangibles | (35) | (33) |
| Tax benefit on acquisition costs | (4) | – |
| Tax benefit on other net losses | (1) | – |
| Tax charge on other net finance income | 3 | 1 |
| Recognition of pre-acquisition tax losses and capital losses | (37) | – |
| Tax amortisation benefit on goodwill and intangibles | 36 | 36 |
| Adjusted income tax charge – continuing operations | (184) | (142) |
| Adjusted income tax charge – discontinued operations | (31) | (52) |
| Total adjusted income tax charge | (215) | (194) |
| Tax rate reflected in adjusted earnings | 25.2% | 25.5% |
The tax (charge)/benefit recognised in other comprehensive income is as follows:
| All figures in £ millions | 2010 | 2009 |
|---|---|---|
| Pension contributions and actuarial gains and losses | (42) | 79 |
| Net investment hedges and other foreign exchange gains and losses | 1 | 12 |
| (41) | 91 |
A tax benefit of £4m (2009: tax benefit £6m) relating to share-based payments has been recognised directly in equity.