Note 8: Taxation on profit on ordinary activities

 

	2007 £'000		2006 £'000
UK corporation tax on profits for the year	299		616
Overseas taxation	1,474		1,258
Total current tax charge for the year	1,773		1,874
Prior year over provision (UK)	(130	)	(51	)
Prior year over provision (Overseas)	14		11
Deferred taxation (see note 15)	89		(340	)
Tax charge on profit on ordinary activities	1,746		1,494

The current year tax charge is higher than the standard UK rate principally due to the proportion of profits generated in the higher tax regime of the US.

The tax charge on associated undertakings included in the above amount is £23,000 (2006: £257,000).

During the year the Group utilised brought forward overseas tax losses of £637,000. The amount of overseas tax losses available to carry forward at 31 July 2007 was £359,000 (2006: £723,000). The estimated value of the deferred tax asset not recognised in relation to these losses, measured at 29%, the weighted effective rate of the countries with losses, was £104,000 (2006: £211,000).

The amount of UK tax losses available for carry forward at 31 July 2007 was £678,000 (2006: £752,000). The estimated value of the deferred tax asset not recognised in relation to these losses at 30%, the UK tax rate, was £203,000.

Reconciliation of current year tax charge	2007 £'000		2006 (restated)* £'000
Profit on ordinary activities before tax	4,473		3,003
Tax on profit on ordinary activities at the standard rate of 30% (2006: 30%)	1,342		901
Factors affecting charge:
Disallowed expenses	92		72
Goodwill amortisation – not deductible for tax purposes	187		153
Depreciation in excess of capital allowances	183		291
Timing differences on tax deductions	348		(128	)
Use of losses brought forward	(195	)	(29	)
Non-utilisation of overseas tax losses	104		226
Higher rates of tax on overseas earnings	462		421
Deductions for overseas tax	(791	)	-
Other	41		(33	)
Current tax charge for the year	1,773		1,874

 

*See note 1. Foreign currencies