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Vodafone – Financials
Notes to the Consolidated Financial Statements continued
6. Taxation
Income tax expense
2008 2007 2006
£m £m £m
United Kingdom corporation tax (income)/expense at 30%:
Current year − − 169
Adjustments in respect of prior years (53) (30) (15)
(53) (30) 154
Overseas current tax expense/(income):
Current year 2,539 2,928 2,077
Adjustments in respect of prior years (293) 215 (418)
2,246 3,143 1,659
Total current tax expense 2,193 3,113 1,813
Deferred tax on origination and reversal of temporary differences:
United Kingdom deferred tax (125) (49) 444
Overseas deferred tax 177 (641) 123
Total deferred tax expense/(income) 52 (690) 567
Total income tax expense from continuing operations 2,245 2,423 2,380
Tax (credited)/charged directly to equity
2008 2007 2006
£m £m £m
Current tax credit (5) (2) (6)
Deferred tax (credit)/charge (65) 11 (11)
Total tax (credited)/charged directly to equity (70) 9 (17)
Factors affecting tax expense for the year
The table below explains the differences between the expected tax expense on continuing operations, at the UK statutory tax rate of 30% for 2008, 2007 and 2006,
and the Group’s total tax expense for each year. Further discussion of the current year tax expense can be found in the section titled “Operating Results” on page 33.
Subsequently, the UK statutory tax rate reduced to 28%, effective from 1 April 2008, and the impact on year end tax balances is included within “Effect of current year
changes in statutory tax rates” below.
2008 2007 2006
£m £m £m
Profit/(loss) before tax on continuing operations as shown in the Consolidated Income Statement 9,001 (2,383) (14,853)
Expected income tax expense/(income) on profit from continuing operations at UK statutory tax rate 2,700 (715) (4,456)
Effect of taxation of associated undertakings, reported within operating profit 134 119 133
Impairment losses with no tax effect − 3,480 7,055
Expected income tax expense at UK statutory rate on profit from continuing operations,
before impairment losses and taxation of associates 2,834 2,884 2,732
Effect of different statutory tax rates of overseas jurisdictions 320 346 411
Effect of current year changes in statutory tax rates 66 1 (15)
Deferred tax on overseas earnings 255 (373) (78)
Assets revalued for tax purposes (16) (197) (142)
Effect of previously unrecognised temporary differences including losses (833) (562) (95)
Adjustments in respect of prior years (254) 145 (470)
Expenses not deductible for tax purposes and other items 321 577 480
Exclude taxation of associated undertakings (448) (398) (443)
Income tax expense from continuing operations 2,245 2,423 2,380
100 Vodafone Group Plc Annual Report 2008