RWS AR 23 Final Single pages - Flipbook - Page 128
Notes to the Consolidated Financial Statements (continued)
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:
2023
£m
2022
£m
Current Tax Charge
4.8
5.7
Overseas current tax charge
UK corporation tax at 22% (2022: 19%)
17.7
18.7
Adjustment in respect of previous years
(2.4)
(4.2)
Deferred Tax Charge
(5.9)
(2.4)
Rate change impact
0.2
0.1
Adjustment in respect of previous years
2.4
2.6
16.8
20.5
Origination and reversal of temporary di昀昀erences
Total tax expense in pro昀椀t or loss
Total tax charge in equity
0.2
0.1
Total tax in other comprehensive income
(0.3)
0.7
Total tax charge for the year
16.7
21.3
Reconciliation of the Group’s tax charge to the UK statutory rate:
2023
£m
2022
£m
(10.9)
83.2
(2.4)
15.8
3.1
2.2
(Loss)/ pro昀椀t before taxation
Notional tax charge at UK corporation tax rate of 22% (2022: 19%)
E昀昀ects of:
Expenses not deductible for tax purposes
Impact of impairment losses
13.7
-
-
(1.6)
Changes in tax rates
0.2
0.1
Higher tax rates on overseas earnings
2.2
4.0
Adjustments in respect of previous years
Tax charge as per the income statement
E昀昀ective tax rate
16.8
20.5
(154.1)%
24.6%
Factors that may a昀昀ect future tax charges
The Group’s taxation strategy is aligned to its business strategy and operational needs. The Directors are responsible
for tax strategy supported by a global team of tax professionals and advisers. RWS strives for an open and transparent
relationship with all tax authorities and are vigilant in ensuring that the Group complies with current tax legislation.
The Group’s e昀昀ective tax rate for the year is higher than the UK’s statutory tax rate due to the impact of non-tax
deductibility of acquisition costs, as well as non recoverable withholding tax su昀昀ered of intragroup dividends. The
Group’s tax rate is also sensitive to the geographic mix of pro昀椀ts and re昀氀ects a combination of higher rates in certain
jurisdictions, such as Germany and Japan, a lower rate in the UK and Czechia with other rates that lie in between.
The adjustments in respect of prior periods includes a release of a release of historic uncertain tax positions, o昀昀set
by new risks identi昀椀ed and provided for during the period. There has also been a recharacterisation of current and
deferred tax assets and liabilities following true ups of 昀椀led tax returns.
Transfer pricing
Tax liabilities are recognised when it is considered probable that there will be a future out昀氀ow of funds to a tax
authority. The methodology used to estimate liabilities is set out in Note 2. In common with other multinational
companies and given the Group has operations in 33 countries, transfer pricing arrangements are in place covering
transactions that occur between Group entities.
128
RWS Holdings plc — Annual Report 2023 NOTES TO THE CONSOLIDATED STATEMENTS
