John Lewis Partnership Annual Report and Accounts 2014

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John Lewis Partnership plc Annual Report and Accounts 2014

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED 8 Taxation

This note explains how our tax charge arises. The tax charge is made up of current and deferred tax. Current tax is the tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustments to tax payable in previous years. Current tax is charged through the consolidated income statement. Deferred tax assets represent the amounts of income taxes recoverable in future periods in respect of taxable temporary differences. Deferred tax liabilities represent the amounts of income payable in future periods in respect of taxable temporary differences.

8.1 Analysis of tax charge for the year Analysis of tax charge

Corporation tax – current year

Corporation tax – adjustment in respect of prior years Total current tax charge Deferred tax – current year

Deferred tax – adjustment in respect of prior years

2014 £m

(61.2) (1.4)

(62.6) 35.0 2.6

(25.0)

Tax credited to other comprehensive income Movement in current tax on pension schemes Movement in deferred tax on pension schemes

8.2 Factors affecting tax charge in the year

The tax charge for the year is lower (2013: lower) than the standard corporation tax rate of 23.17% (2013: 24.33%). The differences are explained below:

2014 £m

Profit before tax

Profit before tax multiplied by standard rate of corporation tax in the UK of 23.17% (2013: 24.33%) Effects of:

Changes in tax rate

Adjustment to current tax in respect of prior years Adjustment to deferred tax in respect of prior years Depreciation on assets not qualifying for tax relief

Difference between accounting and tax base for land and buildings Differences in overseas tax rates Sundry disallowables Total tax charge

Effective tax rate (%) 8.3 Deferred tax

Deferred tax is calculated in full on temporary differences under the liability method using a tax rate of 21% (2013: 23%) for deferred tax assets or liabilities expected to reverse before April 2015 and 20% for those assets or liabilities expected to reverse after April 2015 (2013: 23%).

126.6 (29.3)

14.6 (1.4) 2.6

(12.5) 1.4 2.2

(2.6)

(25.0) 19.8

2013

(restated) £m

132.5 (32.2)

12.7 1.8 0.2

(13.6) 2.0 0.7

(3.1)

(31.5) 23.8

2014 £m

27.4 5.9

33.3 2013

(restated) £m

(77.7) 1.8

(75.9) 44.2 0.2

(31.5) 2013

(restated) £m

34.6 13.3 47.9

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