british american tobacco p.l.c. annual report 2008 - Notes on the accounts: 13 of 31

 
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ANNUAL REPORT 2009

13 Deferred tax

Deferred tax assets comprise:

 Stock
relief
£m 		Excess of
depreciation
over capital
allowances
£m 		Tax
losses
£m 		Retirement
benefits
£m 		Fair value
(gains)/losses
£m 		Other
temporary
differences
£m 		Total
£m
At 1 January 200929 56 64 144 17 245 555
Exchange differences(1)(4)(5)(5)(2) (17)
Credited/(charged) to the income statement5 11(9)(8) 14 13
Credited/(charged) to other comprehensive income  4 (16)(6)(17)(35)
Other (1)(3)(6)(3)26 13
At 31 December 200933 62 51 109 6 268 529
At 1 January 200835 8 22 102  204 371
Exchange differences4 1 3 16  35 59
Credited/(charged) to the income statement(10)44 36 (18) (31)21
Credited to other comprehensive income   45 16 43 104
Subsidiaries acquired     4 4
Other 3 3 (1)1 (10)(4)
At 31 December 200829 56 64 144 17 245 555

Deferred tax liabilities comprise:

 Stock
relief
£m 		Excess of
capital
allowances
over
depreciation
£m 		Undistributed
earnings of
associates and
subsidiaries
£m 		Retirement
benefits
£m 		Fair value
gains/(losses)
£m 		Other
temporary
differences
£m 		Total
£m
At 1 January 200913 207 160 162 1219 762
Exchange differences (12)(6)(14) (21)(53)
(Credited)/charged to the income statement(5)198 (21) (26)(25)
(Credited)/charged to other comprehensive income   (8)(2)3 (7)
Subsidiaries acquired     31 31
Other 1 (1)(2)2 (2)(2)
At 31 December 20098 215 161 117 1 204 706
At 1 January 200814 139 109 141  40 443
Exchange differences4 26 16 33  10 89
(Credited)/charged to the income statement(7)34 39 46 1 (2)111
(Credited)/charged to other comprehensive income  (2)(57) 7 (52)
Subsidiaries acquired 23    150 173
Other2 (15)(2)(1) 14 (2)
At 31 December 200813 207 160 162 1219 762
      2009
£m 		2008
£m
Net deferred tax liabilities     177 207

The net deferred tax liabilities are reflected in the Group balance sheet as follows, after offsetting assets and liabilities where there is a legally enforceable right to offset current tax assets and liabilities and where the deferred income taxes relate to the same fiscal authority.

 2009
£m 		2008
£m
Deferred tax assets(350)(392)
Deferred tax liabilities527 599
 177 207

Deferred tax expected to be recovered within 12 months:		  
 2009
£m 		2008
£m
Deferred tax assets(99)(117)
Deferred tax liabilities95 197
 (4)80

At the balance sheet date, the Group has unused tax losses of £597 million (2008: £982 million) which have no expiry date, and unused tax losses of £331 million (2008: £155 million) which will expire within the next 10 years. No amount of deferred tax has been recognised in respect of these unused losses.

At the balance sheet date, the Group has not recognised a deferred tax asset in respect of deductible temporary differences of £1,092 million (2008: £839 million). These unrecognised deductible temporary differences have no expiry date.

At the balance sheet date, the Group has unused tax credits of £80 million (2008: £199 million) which have no expiry date. No amount of deferred tax has been recognised in respect of these unused tax credits.

At the balance sheet date, the aggregate amount of taxable temporary differences associated with undistributed earnings of subsidiaries for which deferred tax liabilities have not been recognised was £2 billion (2008: £7 billion). This amount reflects current legislation on the taxation of cross border remittances of dividends. No liability has been recognised in respect of these differences because the Group is in a position to control the timing of the reversal of the temporary differences and it is probable that such differences will not reverse in the foreseeable future.