41061 Unite AR22 HI-RES WEB-READY - Flipbook - Page 200
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THE UNITE GROUP PLC | Annual Report and Financial Statements 2022
NOTES TO THE FINANCIAL STATEMENTS continued
Section 2: Results for the year continued
2.5 Tax continued
2.5a) Tax – income statement
The total taxation charge/(credit) in the income statement is analysed as follows:
2022
£m
2021
£m
Corporation tax on residual business income arising in UK companies
0.5
1.0
Income tax on UK rental income arising in non-UK companies
0.4
0.3
(0.2)
(2.2)
Current tax charge/(credit)
0.7
(0.9)
Origination and reversal of temporary differences
0.5
(0.2)
–
(0.2)
Adjustments in respect of prior periods
Effect of change in tax rate
Adjustments in respect of prior periods
0.4
(0.1)
Deferred tax charge/(credit)
0.9
(0.5)
Total tax charge/(credit) in income statement
1.6
(1.4)
The movement in deferred tax provided is shown in more detail in note 2.5d.
In the income statement, a tax charge of £1.6 million arises on a profit before tax of £358.0 million. The taxation charge
that would arise at the standard rate of UK corporation tax is reconciled to the actual tax charge as follows:
Profit before tax
Income tax using the UK corporation tax rate of 19% (2021: 19%)
2022
£m
2021
£m
358.0
343.1
67.2
65.2
Property rental business profits exempt from tax in the REIT Group
(27.5)
(18.4)
Property revaluations not subject to tax
(25.8)
(43.3)
Mark to market changes in interest rate swaps not subject to tax
(13.4)
(2.9)
Effect of indexation on investments
0.1
–
Effect of other permanent differences
0.5
0.2
Effect of tax deduction transferred to equity on share schemes
0.3
0.3
–
(0.2)
Prior year adjustments
0.2
(2.3)
Total tax charge/(credit) in income statement
1.6
(1.4)
Rate difference on deferred tax
As a UK REIT, the Group is exempt from UK corporation tax on the profits from its property rental business. Accordingly,
the element of the Group’s profit before tax relating to its property rental business has been separately identified in the
reconciliation above.
No deferred tax asset has been recognised in respect of the Group’s accumulated tax losses on the basis that they are not
expected to be utilised in future periods. At 31 December 2022 these losses totalled £15.3 million (2021: £14.6 million).
Although the Group does not pay UK corporation tax on the profits from its property rental business, it is required to
distribute 90% of the profits from its property rental business after accounting for tax adjustments as a Property Income
Distribution (PID). PIDs are charged to tax in the same way as property income in the hands of the recipient. For the year
ended 31 December 2022 the required PID is expected to be fully paid by the end of 2023.
2.5b) Tax – other comprehensive income
Within other comprehensive income a tax charge totalling £nil (2021: £nil) has been recognised representing deferred tax.
