RWS Annual Report 2022 web - Flipbook - Page 123
9. TAXATION
Accounting policy
The charge for current taxation is based on the results for the year as adjusted for items which are non-assessable
or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet
date. Current tax assets and liabilities are offset when the relevant tax authority permits net settlement and the group
intends to settle on a net basis.
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for taxation purposes where this differs.
Deferred tax is not recognised for temporary differences related to investments in subsidiaries and associates where
the Group is able to control the timing of the reversal of the temporary difference and it is probable that this will not
reverse in the foreseeable future; on the initial recognition of non-deductible goodwill; and on the initial recognition of
an asset or liability in a transaction that is not a business combination and that, at the time of the transaction, does not
affect the accounting or taxable profit.
Deferred tax is measured on an undiscounted basis, and at the tax rates that have been enacted or substantively
enacted by the reporting date that are expected to apply in the periods in which the asset or liability is settled
Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against
which they can be used and are reviewed at each reporting date.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority,
when the Group intends to settle its current tax assets and liabilities on a net basis and that authority permits the
Group to make a single net payment.
Current and deferred tax is recognised in the income statement except when it relates to items credited or charged
directly to other comprehensive income or equity, in which case the current or deferred tax is also recognised within
other comprehensive income or equity respectively (for example share-based payments).
Uncertain tax positions
The Group operates in numerous tax jurisdictions around the world. At any given time, the Group is involved in
disputes and tax audits and will have a number of tax returns potentially subject to audit, significant issues may take
several years to resolve. In estimating the probability and amount of any tax charge, management takes into account
the views of internal and external advisers and updates the amount of tax provision whenever necessary. The ultimate
tax liability may differ from the amount provided depending on interpretations of tax law, settlement negotiations or
changes in legislation. As referenced in note 2, the Group considers all tax positions separately and uses either the
most likely or expected value method of calculation on a case by case basis.
VAT
Revenues, expenses and assets are recognised net of the amount of VAT except where the VAT incurred on a purchase
of goods and services is not recoverable from the taxation authority, in which case the VAT is recognised as part of the
cost of acquisition of the asset or as part of the expense item as applicable; and trade receivables and payables are
stated with the amount of VAT included. The net amount of VAT recoverable from, or payable to, the taxation authority
is included as part of receivables or payables in the balance sheet.
Taxation recognised in income and equity is as follows:
2022
£m
2021
£m
Current Tax Charge
5.7
4.7
- Overseas current tax charge
18.7
15.9
Adjustment in respect of previous years
(4.2)
(3.0)
(2.4)
(4.4)
- UK corporation tax at 19% (2021: 19%)
Deferred Tax Charge
Origination and reversal of temporary differences
Rate change impact
0.1
2.0
Adjustment in respect of previous years
2.6
(1.4)
20.5
13.8
0.1
(0.4)
Total tax expense in profit or loss
Total tax charge in equity
Total tax in other comprehensive income
Total tax charge for the year
NOTES TO THE CONSOLIDATED STATEMENTS
0.7
0.2
21.3
13.6
RWS — Annual Report 2022
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