NCC Group plc Annual Report 2021

Notes to the Financial Statements continued for the year ended 31 May 2021

8 Finance costs

2021 £m

2020 £m

1.3 1.2

Interest payable on bank loans and overdrafts

1.8 1.2

Interest expense on lease liabilities

Finance costs

2.5

3.0

The above finance costs relate entirely to liabilities not at fair value through profit or loss.

9 Taxation Recognised in the Income Statement

2020 (restated) 2 £m

2021 £m

Current tax expense Current year

(0.8) (0.4)

2.0

Adjustment to tax expense in respect of prior periods

(0.6)

2.7 4.3

Impact of prior year US R&D tax credits

Foreign tax

4.4

Total current tax

5.8

5.8

Deferred tax expense Origination and reversal of temporary differences

(0.7)

(2.7) (0.3) (0.4)

0.4

Movement in tax rate

Recognition of previously unrecognised deductible timing differences

(0.8)

Impact of prior year US R&D tax credits

0.5 0.3

0.1

Adjustment to tax expense in respect of prior periods

Total deferred tax

(1.0)

(2.6)

Tax expense on continuing operations

4.8

3.2

Reconciliation of effective tax rate

2020 (restated) 2 £m

2021 £m

14.8

Profit before taxation

9.6

2.8

Current tax using the UK corporation tax rate of 19% (2020: 19%)

1.8

Effects of: Items not (assessable)/deductible for tax purposes Adjustment to tax charge in respect of prior periods

(0.5) (0.3)

0.9

(0.3)

1.9

Impact of prior year US R&D tax credits Impact of current year US R&D tax credits Differences between overseas tax rates

0.5

(0.3)

0.7 0.1 0.4

0.9

Movements in temporary differences not recognised

(0.3) (0.3)

Movement in tax rate

Total tax expense

4.8

3.2

Current and deferred tax recognised directly in equity was a credit of £0.3m (2020: £nil). In the March 2021 budget the UK government announced that legislation will be introduced in the Finance Bill 2021 to increase the main rate of UK corporation tax from 19% to 25%, effective 1 April 2023. This rate was substantively enacted on 24 May 2021 and therefore the deferred tax balances as at 31 May 2021 are generally measured at a rate of 25%.

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NCC Group plc — Annual report and accounts for the year ended 31 May 2021

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