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| All figures in £ millions | 2004 | 2003 |
|---|---|---|
| Analysis of (charge)/benefit in the year | ||
| Current taxation | ||
| UK corporation tax for the year | 10 | (9) |
| Adjustments in respect of prior years | (2) | 10 |
| 8 | 1 | |
| Overseas tax for the year | (82) | (59) |
| Adjustments in respect of prior years | 27 | 3 |
| Associates | (3) | (5) |
| (50) | (60) | |
| Deferred taxation | ||
| Origination and reversal of timing differences | ||
| UK | (5) | (4) |
| Overseas | (30) | (54) |
| Adjustments in respect of prior years | 23 | 43 |
| (12) | (15) | |
| Taxation | (62) | (75) |
| The current tax charge for the year is different from the standard rate of corporation tax in the UK (30%). The differences are explained below: | ||
| All figures in £ millions | 2004 | 2003 |
| Profit before tax | 171 | 152 |
| Expected charge at UK corporation tax rate of 30% (2003: 30%) | (51) | (46) |
| Effect of overseas tax rates | 7 | 8 |
| Effect of tax losses | (9) | (5) |
| Timing differences | 35 | 64 |
| Non-deductible goodwill amortisation | (61) | (90) |
| Adjustments in respect of prior years and other items | 29 | 9 |
| Current tax charge for the year | (50) | (60) |
| All figures in percentages | 2004 | 2003 |
| Tax rate reconciliation | ||
| UK tax rate | 30.0 | 30.0 |
| Effect of overseas tax rates | 1.4 | 1.3 |
| Other items | (1.1) | (0.1) |
| Tax rate reflected in adjusted earnings | 30.3 | 31.2 |
Note The current tax charge on profit before tax will continue to be affected by the fact that there is only partial tax relief available on the goodwill amortisation charged in the accounts. The charge will also be affected by the utilisation of tax losses and by the impact of other timing differences, in both cases mainly in the United States. In both 2004 and 2003 the tax charge was materially affected by adjustments in respect to prior years; it is not practicable to forecast the possible effect of such items in future years as this will depend on progress in agreeing the Group's tax returns with the tax authorities. The total charge in future years will also be affected by any changes to corporation tax rates and/or any other relevant legislative changes in the jurisdictions in which the Group operates and by the mix of profits between the different jurisdictions.
