Savills plc 2012 Annual Report - (PDF) - Investor relations

Notes to the financial statementsYear ended 31 December 2012continued10. Finance income and costsGroup2012£mBank interest receivable 1.1 1.1Fair value gain – interest rate swaps 0.1 0.3Finance income 1.2 1.42011£mBank interest payable (0.9) (1.3)Finance costs (0.9) (1.3)Net finance income 0.3 0.111. Income tax expenseAnalysis of tax expense for the yearGroup2012£mCurrent taxUnited Kingdom:Corporation tax on profits for the year 12.2 10.6Adjustment in respect of prior years 0.8 1.113.0 11.72011£mForeign tax 6.8 6.5Adjustment in respect of prior years (0.2) (0.3)Total current tax 19.6 17.9Deferred taxRepresenting:United Kingdom (4.5) (1.9)Effect of change in UK tax rate on deferred tax 0.6 –Foreign tax (1.2) (1.9)Adjustment in respect of prior years 0.9 (0.9)Total deferred tax (Note 17) (4.2) (4.7)Income tax expense 15.4 13.2The weighted average applicable UK corporation tax rate was 24.5% (2011: 26.5%) due to the reduction of the UK corporation tax ratefrom 26% to 24% which was effective from 1 April 2012. The tax on the Group’s profit before tax differs from the theoretical amountthat would arise using the weighted average tax rate applicable to Group profits. The tax for the year is higher (2011: higher) than theweighted average rate of 24.5%. The total tax charge on profit can be reconciled to the accounting profit as follows:Group2012£mProfit before tax 54.2 40.02011£mTax on profit at 24.5% (2011: 26.5%) 13.3 10.6Effects of:Adjustment to tax in respect of prior years 1.5 (0.1)Adjustments in respect of foreign tax rates (1.7) (2.3)Utilisation of previously unprovided tax losses (1.1) –Impact of (rising)/falling share price compared to the fair value of share awards/options at date of grant (0.9) 0.8Income not subject to tax (0.1) (0.7)Non-deductible tax losses 1.4 1.6Expenses and other charges not deductible for tax purposes 3.8 3.0Impairment of associate undertaking – 0.5Tax on joint ventures and associates (1.4) (1.0)Effect of change in UK tax rate on deferred tax 0.6 0.8Income tax expense on profit 15.4 13.284 Savills plc Report and Accounts 2012