: notes to the accounts :
7. Taxation
| all figures in £ millions |
1999
|
1998
|
|
|
|
|
| UK |
|
|
| Corporation tax at 30.2% (1998: 31%) |
104
|
134
|
| Deferred taxation |
6
|
(4)
|
| Double taxation relief |
(1)
|
(1)
|
| Tax on franked investment income |
4
|
––
|
| Associates |
9
|
8
|
| Overseas |
|
|
| Overseas taxation |
52
|
45
|
| Deferred taxation |
––
|
1
|
| Associates |
6
|
5
|
|
|
|
|
|
180
|
188
|
|
|
|
|
|
|
|
|
|
| all figures in percentages |
1999
|
1998
|
| Tax rate reconciliation |
|
|
| UK tax rate |
30.2
|
31.0
|
| Effect of utilisation of tax losses in the US |
(7.7)
|
(2.7)
|
| Other items |
2.5
|
(0.3)
|
|
|
|
|
| Tax rate reflected in adjusted earnings |
25.0
|
28.0
|
| Effect of profits/(losses) excluded from adjusted earnings |
12.5
|
1.9
|
|
|
|
|
| Tax rate reflected in earnings |
37.5
|
29.9
|
|
|
|
|
Note : The Group continues to have substantial tax losses available in the US which are not recognised in the accounts. Following the acquisition of Simon & Schuster at the end of 1998, US profits are higher in 1999 than in 1998 but are still more than offset by the available losses so reducing the Group tax rate reflected in adjusted earnings. As in 1998, relief has not been taken for the Simon & Schuster integration costs to the extent that they arose in the US, hence increasing the effective tax rate on earnings.
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