Notes to the financial statements
For the 52 weeks ended 1 March 2008
12. Taxation
| Analysis of charge in period | 52 weeks ended 1 March 2008 £m |
Short period ended 3 March 2007 £m |
|---|---|---|
| Current tax: | ||
| UK corporation tax | (119.4) | (94.0) |
| Double tax relief | 1.7 | 3.5 |
| Adjustments in respect of prior years | 17.8 | (0.9) |
| Total current UK tax charge | (99.9) | (91.4) |
| Overseas tax | (3.9) | (4.4) |
| Total current tax charge | (103.8) | (95.8) |
| Deferred tax: | ||
| Origination and reversal of temporary differences | (17.4) | (16.5) |
| Adjustments in respect of prior years | (11.2) | 2.8 |
| Rate change impact | 1.0 | – |
| Total tax expense in income statement | (131.4) | (109.5) |
Factors affecting the tax charge
The effective tax rate for the year of 30.8% (2007: 36.9%), is higher than the standard rate of corporation tax in the UK of 30.0% (2007: 30.0%). The differences are explained below:
| 52 weeks ended 1 March 2008 £m |
Short period ended 3 March 2007 £m |
|
|---|---|---|
| Profit before tax | 426.0 | 296.9 |
| Profit before tax multiplied by the standard rate of corporation tax in the UK of 30% | (127.8) | (89.1) |
| Effects of: | ||
| Expenses not deductible for tax purposes | (14.2) | (25.6) |
| Differences in effective tax rates on overseas earnings | 3.0 | 3.3 |
| Adjustments to tax charge in respect of prior years | 6.6 | 1.9 |
| Rate change impact | 1.0 | – |
| Total tax expense in income statement | (131.4) | (109.5) |
Factors that may affect future tax charges
In the foreseeable future, Home Retail Group’s tax charge will continue to be influenced by the profile of profits earned in the different tax jurisdictions within the United Kingdom and the Republic of Ireland.
| Exceptional tax (see note 10) | 52 weeks ended 1 March 2008 £m |
Short period ended 3 March 2007 £m |
|---|---|---|
| Exceptional profit/(loss) before tax | 0.8 | (15.8) |
| Exceptional profit/(loss) before tax multiplied by the standard rate of corporation tax in the UK of 30% | (0.2) | 4.7 |
| Effects of: | ||
| Expenses not deductible for tax purposes | (0.8) | (2.2) |
| Adjustments to tax charge in respect of prior years | – | (7.8) |
| Net exceptional tax credit in respect of prior years | 6.7 | – |
| Exceptional tax credit/(charge) | 5.7 | (5.3) |
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