6 – Income tax ( credit )/ charge ( continued )
Notes to the consolidated financial statements
Keepmoat . com 42
6 – Income tax ( credit )/ charge ( continued )
The table below reconciles the income tax expense for the year to tax at the UK statutory rate :
|
2018 |
2017 |
|
£’ 000 |
£’ 000 |
Profit before tax |
13,514 |
25,435 |
Income tax charge at UK corporation tax rate at 19 % ( 2017 : 20 %) |
2,568 |
5,087 |
Effects of : Expenses not deductible for tax purposes 1 |
262 |
1,205 |
Non-taxable income |
( 807 ) |
( 237 ) |
Transfer pricing adjustment |
( 125 ) |
( 273 ) |
Adjustment in respect of previous years 2 |
( 166 ) |
3,811 |
Land remediation relief |
- |
( 241 ) |
Difference in applicable tax rates |
148 |
106 |
Debt cap adjustment |
- |
( 175 ) |
Group relief not paid for 3 |
( 4,449 ) |
( 765 ) |
Adjustment for joint venture |
140 |
- |
Income tax ( credit )/ charge for the year |
( 2,429 ) |
8,518 |
1 Expenses not deductible for tax purposes relates to legal expenses in connection with the disposal of the Regeneration business and the acquisition of MCI Developments Limited .
2 Adjustments in respect of prior years ’ relates to the final allocations of group relief for the year ended 31 March 2016 .
3 Following ther sale of the Regeneration business , group relief will no longer be paid for .
Factors affecting current and future tax charges Changes to the UK Corporation tax rates were enacted as part of the Finance Bill 2015 – 2016 and the Finance Act 2016 . These include reductions to the main rate of corporation tax to 18 % from 1 April 2019 and 17 % from 1 April 2020 . Deferred tax is calculated in full on temporary differences under the liability method , using a tax rate of 18 % ( 2017 : 19 %).