RWS Annual Report 2022 web - Flipbook - Page 125
Deferred tax
At 1 October 2020
Share based
payments
£m
Accelerated
capital
allowances
£m
Other
temporary
differences
£m
Acquired
intangibles
£m
Tax losses
£m
Total
£m
(28.4)
0.2
(1.1)
1.0
(28.5)
-
(0.3)
(0.5)
1.6
(0.3)
0.9
1.4
0.1
0.1
2.6
(44.4)
15.3
(26.3)
Credited to income
0.2
(0.2)
1.8
0.5
0.1
2.4
Credited to equity / OCI
0.4
-
-
-
-
0.4
Adjustments in respect of prior years
Acquisitions*
Foreign exchange differences
-
-
(0.2)
1.1
(0.1)
0.8
0.6
(1.7)
6.8
(71.6)
16.2
(49.7)
Adjustments in respect of prior years
-
(0.1)
1.7
-
(4.2)
(2.6)
Acquisitions
-
-
-
(2.5)
-
(2.5)
At 30 September 2021
Credited to income
Charged to equity / OCI
Foreign exchange differences
At 30 September 2022
-
-
0.4
4.4
(2.5)
2.3
(0.1)
-
-
-
-
(0.1)
-
-
0.9
(6.0)
0.4
(4.7)
0.5
(1.8)
9.8
(75.7)
9.9
(57.3)
The acquisitions line includes £0.9m of deferred tax in respect of the Moravia error correction referenced in this note
Deferred tax assets and liabilities are presented on the balance sheet after jurisdictional netting as follows:
2022
£m
Deferred tax assets
2021
£m
1.1
1.5
Deferred tax liabilities
(58.4)
(51.2)
Net deferred tax liability
(57.3)
(49.7)
Deferred tax assets and liabilities
Deferred tax is calculated using tax rates that are expected to apply in the period when the liability has been settled or
the asset realised based on tax rates that have been enacted or substantively enacted at the reporting date.
Most deferred tax assets are recognised because they can offset the future taxable income from existing taxable
differences (primarily on acquired intangibles) relating to same jurisdiction or entity. Where there are insufficient taxable
differences, deferred tax assets are recognised in respect of losses and other deductible differences where current
forecasts indicate profits will arise in future periods against which they can be deducted.
Losses
At the balance sheet date the Group has unused tax losses of £143.9m (2021: £143.0m) available for offset against future
profits. A deferred tax asset of £9.9m (2021: £16.7m) has been recognised in respect of £44.0m (2021: £72.6m) of such
losses. These losses include corresponding adjustments that could be claimed on settlement of uncertain tax positions
with overseas tax authorities as accounted for under IFRIC 23.
No deferred tax asset has been recognised in respect of the remaining £99.9m (2021: £70.4m) as these can only be used
to offset limited types of profits and as it is not considered probable that there will be the required type of future trading
or non-trading profits available in the correct entities necessary to permit offset and recognition.
The unrecognised deferred tax asset on losses is £23.5m (2021: £17.7m).
Recognised deferred tax assets principally relate to UK and US activities of the acquired SDL business.
The Group has recognised deferred tax assets on losses in the US which have a 20 year expiry date and expects to
use these losses in this period, the earliest date these losses expire is 31 December 2033 and at the year-end losses
amounted to £6.0m (2021: £10.0m).
Unremitted earnings
Dividends received from subsidiaries are largely exempt from UK tax but may be subject to dividend withholding taxes
levied by the overseas tax jurisdictions in which the subsidiaries operate. The gross temporary differences of those
subsidiaries affected by such potential taxes is £82.3m. Since the Group is able to control the timing of reversal of these
temporary differences, a current tax liability of £0.2m has been recognised on the unremitted earnings it is anticipating
to be distributed that would give rise to a tax charge. The Group has an estimated unrecognised deferred tax liability of
£4.7m of unremitted earnings where no distributions are expected to be paid in the foreseeable future.
NOTES TO THE CONSOLIDATED STATEMENTS
RWS — Annual Report 2022
125
