Notes to the financial statements
5. Tax expense
| Group | 2008 £m |
2007 £m |
|---|---|---|
| Total current tax | 22.0 | 23.3 |
| Total deferred tax (note 13) | (2.3) | (8.8) |
| Tax expense | 19.7 | 14.5 |
The tax credit in respect of exceptional demerger costs in 2007 was £0.4m.
| Group | 2008 £m |
2007 £m |
|---|---|---|
| Tax credit on items taken directly to equity | ||
| Deferred tax (credit) / charge on net fair value gains – cash flow hedges | (2.5) | 0.4 |
| Deferred tax credit on actuarial losses on retirement benefit asset / obligation | (0.9) | (0.5) |
| (3.4) | (0.1) |
The rate of tax expense on the profit before taxation for the year ended 31 December 2008 is lower than (2007: higher than) the standard rate of corporation tax in the UK of 28.5% (2007: 30.0%). The differences are explained as follows:
| Group | 2008 £m |
2007 £m |
|---|---|---|
| Profit before taxation | 70.3 | 47.0 |
| Profit before taxation multiplied by the standard rate of corporation tax in the UK of 28.5% (2007: 30%) | 20.0 | 14.1 |
| Effects of: | ||
| – adjustment in respect of prior years | 0.8 | (1.0) |
| – adjustment in respect of foreign tax rates | (8.0) | (4.6) |
| – expenses not deductible for tax purposes | 4.3 | 5.0 |
| – overseas taxable dividends | 2.6 | 1.0 |
| Total tax expense | 19.7 | 14.5 |