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Notes to the consolidated financial statements
Year ended 31 July 2007
6. Taxation
| The tax charge for the year comprises: | 2007 £m |
2006 £m |
|---|---|---|
| Current year tax charge | 189 | 230 |
| Adjustments to tax charge in respect of prior years | (15) | (7) |
| Total current tax charge | 174 | 223 |
| Deferred tax (credit)/charge: origination and reversal of temporary differences | (14) | 9 |
| Total tax charge | 160 | 232 |
| Tax on items charged to equity: | 2007 £m |
2006 £m |
|---|---|---|
| Current tax charge on exchange movements offset in reserves | – | (7) |
| Deferred tax credit/(charge) on changes in the fair value of cash flow hedges | 1 | (4) |
| Deferred tax charge on actuarial gain on retirement benefits | (20) | (2) |
| Deferred tax credit on available-for-sale investments | – | 2 |
| Deferred tax credit/(charge) on share-based payments | 1 | (6) |
| Current tax credit on share-based payments | 1 | 4 |
| Total tax on items charged to equity | (17) | (13) |
| Tax reconciliation: | 2007 % |
2006 % |
|---|---|---|
| Statutory UK corporation tax rate | 30 | 30 |
| Prior year amounts | (3) | (1) |
| Non-deductible and non-taxable items | (3) | (6) |
| Change in tax rates | (2) | – |
| Higher average tax rates in overseas companies | 3 | 5 |
| Effective tax rate on profit excluding the effect of the amortisation and impairment of intangibles | 25 | 28 |
| The tax expense can be analysed as follows: | 2007 £m |
2006 £m |
|---|---|---|
| UK | 20 | 18 |
| Overseas | 154 | 205 |
| Current tax | 174 | 223 |
| UK | 2 | 4 |
| Overseas | (16) | 5 |
| Deferred tax | (14) | 9 |