Annual report and accounts 2009 (PDF) - Coventry Building Society

14. PROVISION FOR FSCS LEVIESAll deposit-taking institutions that are members of the UK Financial Services Compensation Scheme (FSCS) are required tocontribute to the costs of the FSCS in safeguarding the deposits of savers in failed financial institutions. The Society is, andcontinues to be, a member of the FSCS.Contributions to the FSCS are calculated according to a prescribed formula using the retail savings balances of all deposittakinginstitutions who are members of the FSCS.FSCS rules require the Society to provide for £2.0 million in its 2009 accounts with respect to the estimated levies for theperiod 2010/11 and revisions for the levy estimate for the period 2009/10 previously provided in its 2008 accounts (2008 -£11.4 million for the periods 2008/9 and 2009/10).These costs are ‘exceptional’ because they are outside of the Society’s control and are dependent upon the extent of failuresof other deposit-taking institutions who are members of the FSCS.15. PROVISION FOR IMPAIRMENT OF DEBT SECURITIESThe Society has recovered £1.5 million from the administrators of the Icelandic banking group, Kaupthing. The investment indebt securities of £23.9 million was previously fully provided for in 2008. It is unclear when, and to what extent, the Society willfurther recover its investment.These recoveries and costs are ‘exceptional’ because, prior to 2008, no impairment of debt securities was ever previouslyrequired, and the provision does not relate to the Society’s underlying financial performance.16. CHARITABLE DONATION TO POPPY APPEALDuring 2009 the Society again partnered with The Royal British Legion to raise funds for the annual Poppy Appeal. The Societyhas provided for a donation of £1.3 million (2008 - £1.6 million) to the Poppy Appeal in addition to paying a fixed rate of interest tomembers on a savings bond and variable rate on a savings account.17. TAXATIONGroup Society Group Society2009 2009 2008 2008£m £m £m £mCurrent taxUK corporation tax at 28% (2008 – 28.5%) 15.3 13.8 7.8 7.0UK corporation tax – adjustment in respect of prior years (4.9) (4.4) 0.1 0.1Total current tax 10.4 9.4 7.9 7.1Deferred taxCurrent year 0.6 0.6 (0.3) (0.3)Adjustment in respect of prior years 1.7 1.7 - -Total deferred tax 2.3 2.3 (0.3) (0.3)12.7 11.7 7.6 6.8The effective tax rate for the year is 22.6% for the Group and 23.0% for the Society (2008 - 28.8% for the Group and 28.9% forthe Society). Further information relating to deferred tax is presented in note 26.51