Avis online annual report 2008

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45

Notes to the Consolidated Financial Statements continued

for the year ended 31 December 2007

7 Taxation

a) Analysis of tax charge/(credit)

	2007						2006
	Underlying¹ €m		Amounts excluded from underlying €m		Total €m		Underlying¹as restated² €m		Amounts excluded from underlying €m		Total as restated² €m
Continuing operations
Current UK tax
UK corporation tax on profits for the year before exceptional items	(0.3)		(0.4)		(0.7)		4.4		0.1		4.5
Tax on exceptional items	–		3.1		3.1		–		(3.9)		(3.9)
Adjustments in respect of prior years	1.9		–		1.9		0.3		–		0.3
Current UK tax	1.6		2.7		4.3		4.7		(3.8)		0.9
Current foreign tax
Foreign corporation tax on profits for the year before exceptional items	8.2		–		8.2		8.1		–		8.1
Current tax on exceptional items	–		(0.1)		(0.1)		–		(2.1)		(2.1)
Adjustments in respect of prior years	3.4		–		3.4		(1.9)		–		(1.9)
Current foreign tax	11.6		(0.1)		11.5		6.2		(2.1)		4.1
Current tax – continuing	13.2		2.6		15.8		10.9		(5.9)		5.0
Analysed as: Corporation tax on profits for the year before exceptional items	7.9		(0.4)		7.5		12.5		0.1		12.6
Tax on exceptional items	–		3.0		3.0		–		(6.0)		(6.0)
Adjustments in respect of prior years	5.3		–		5.3		(1.6)		–		(1.6)
Current tax – continuing	13.2		2.6		15.8		10.9		(5.9)		5.0

	2007						2006
	Underlying¹ €m		Amounts excluded from underlying €m		Total €m		Underlying¹as restated² €m		Amounts excluded from underlying €m		Total as restated² €m
Deferred tax
Origination and reversal of temporary differences	5.6		0.5		6.1		5.2		0.1		5.3
Deferred tax on exceptional items	–		3.4		3.4		–		0.3		0.3
Adjustments in respect of prior years	(7.4)		–		(7.4)		(7.3)		–		(7.3)
Deferred tax – continuing	(1.8)		3.9		2.1		(2.1)		0.4		(1.7)
Taxation – continuing	11.4		6.5		17.9		8.8		(5.5)		3.3

Discontinued operation - Greece
Current tax	–		–		–		0.8		–		0.8
Deferred tax	(1.1)		–		(1.1)		1.6		–		1.6
Taxation including discontinued operation	10.3		6.5		16.8		11.2		(5.5)		5.7

1 see Basis of Preparation.
2 Restated following the reclassification of the discontinued operation - Greece (see Note 39).

b) Tax charge/(credit) taken directly to the Statement of Recognised Income and Expense

	2007						2006
	Underlying¹ €m		Amounts excluded from underlying €m		Total €m		Underlying¹ €m		Amounts excluded from underlying €m		Total as restated² €m
Deferred tax charge/(credit) on cash flow hedges	–		0.6		0.6		–		(1.7)		(1.7)
Current tax charge on exchange movements offset in reserves	–		(0.9)		(0.9)		–		0.6		0.6
Deferred tax charge/(credit) on actuarial gains	–		3.4		3.4		–		(0.4)		(0.4)
	–		3.1		3.1		–		(1.5)		(1.5)

1 see Basis of Preparation.

c) Reconciliation of tax charge/(credit)

	2007						2006
	Underlying¹ €m		Amounts excluded from underlying €m		Total €m		Underlying¹ €m		Amounts excluded from underlying €m		Total as restated² €m
Profit/(loss) before taxation (excluding discontinued operation)	37.6		(4.4)		33.2		30.0		(28.2)		1.8
Tax at the UK corporation tax rate of 30%	11.3		(1.3)		10.0		9.0		(8.5)		0.5
Differing rates applied to overseas profits	(5.9)		(0.4)		(6.3)		(3.9)		–		(3.9)
Expenses not deductible for tax purposes	3.0		2.6		5.6		2.9		3.3		6.2
Utilisation of tax losses	(0.6)		–		(0.6)		–		–		–
Adjustments in respect of prior years	(4.4)		4.2		(0.2)		(7.8)		–		(7.8)
Deferred assets not recognised	8.0		1.4		9.4		8.6		(0.3)		8.3
Taxation – continuing	11.4		6.5		17.9		8.8		(5.5)		3.3
Discontinued operation (see Note 39)	(1.1)		–		(1.1)		2.4		–		2.4
Taxation including discontinued operation	10.3		6.5		16.8		11.2		(5.5)		5.7

1 see Basis of Preparation.
2 Restated following the prior year adjustment regarding Avis Portugal (see Note 33).