NOTES TO THE GROUP CONSOLIDATED FINANCIAL STATEMENTS CONTINUED FOR THE YEAR ENDED 31 MARCH 2026
10. Tax expense The major components of the corporation tax expense are summarised below:
10. Tax expense continued
Deferred tax
2026 £m
2025 £m
2026 £m
2025 £m
Deferred tax liabilities
(0.6) (15.5) (1.0) (17.1)
Accelerated capital allowances
(0.7) (17.5) (2.8) (21.0)
Current taxation: UK adjustments in respect of prior years
Intangibles
0.2 0.2 11.1
(0.5) (0.5)
Other temporary differences Gross deferred tax liabilities Deferred tax assets Decelerated capital allowances
Overseas tax
11.3
(1.6)
Overseas adjustments in respect of prior years
(0.6) 10.7 10.2 (0.4) (1.9) (0.2) (0.5)
0.2 0.5 0.8 3.0 2.8 7.3
0.2 0.6 0.9 3.0 5.4 10.1
9.5 9.7
Pensions Tax losses
Total current taxation expense
Deferred taxation Origination and reversal of temporary differences within the UK Origination and reversal of temporary differences overseas
Share-based payment plans Other temporary differences Gross deferred tax assets
(1.4) (0.8) (0.4)
Adjustment in respect of prior years Increased recognition of historical losses
£1.9m of deferred tax assets (2025: £5.0m) and £4.1m of deferred tax liabilities (2025: £4.9m) are expected to be recovered or settled no more than 12 months after the reporting period. £5.4m of deferred tax assets (2025: £5.1m) and £13.0m of deferred tax liabilities (2025: £16.1m) are expected to be recovered or settled more than 12 months after the reporting period. Movements in deferred tax
– –
Impact of tax rate changes Total deferred taxation credit
0.2
(2.6)
(2.8)
Tax expense reported in the consolidated Statement of Profit or Loss
7.1
7.4
Accelerated capital allowances £m
Share- based payments £m
Other temporary differences £m
2026 £m
2025 £m
Tax losses £m
Tax recognised in other comprehensive income
Intangibles £m
Pensions £m
Total £m
(0.1) (0.1)
Decrease in deferred tax liability on pension Tax reported in other comprehensive income
1.2 1.2
At 1 April 2024
(0.5)
(20.2)
0.4 1.8
4.2
1.2
(13.1)
(Charged)/credited – to profit and loss
– – –
3.1
(1.0)
(0.9)
0.1
1.5
2.8
2026 £m
2025 £m
– to other comprehensive income
– –
1.2
– –
–
– –
1.2
Tax recognised in equity
– directly to equity
–
(1.3)
(1.3)
(0.1) (0.1)
Decrease in deferred tax asset on share-based payments
(1.3) (1.3)
Exchange differences on translation of foreign subsidiaries
Tax reported in equity
– –
0.3
– –
– –
– –
(0.1)
0.2
Acquisition-related movements
(0.7)
–
(0.7)
The effective rate of taxation for the year is lower (2025: lower) than the standard rate of taxation in the UK of 25% (2025: 25%). A reconciliation of the tax expense applicable to the profit before tax, at the statutory tax rate, to the actual tax expense at the Group’s effective tax rate for the years ended 31 March 2026 and 31 March 2025 respectively is presented below:
At 31 March 2025 (Charged)/credited – to profit and loss
(0.5)
(17.5)
0.6 0.9
3.0
2.6
(10.9)
0.1
3.4
–
(0.1)
0.1
(0.9)
2.6
– to other comprehensive income
– –
– –
(0.1)
– –
–
– –
(0.1) (0.1)
2026 £m
2025 £m
– directly to equity
–
(0.1)
Exchange differences on translation of foreign subsidiaries
36.1
Profit before tax
32.0
– –
(0.1) (1.3)
– –
– –
– –
0.1
–
9.0
Profit before taxation multiplied by standard rate of corporation tax in the UK of 25% (2025: 25%)
8.0
Acquisition-related movements
–
(1.3)
Effect of: Differences in overseas tax rates
At 31 March 2026
(0.4)
(15.5)
0.5 0.8
3.0
1.8
(9.8)
(0.2) (0.1)
(0.2) (0.1)
Tax losses not recognised Non-deductible expenses
At 31 March 2026, £nil (2025: £nil) of the deferred tax asset in respect of tax losses relates to tax jurisdictions in which tax losses were incurred in the current or preceding period. The recognition of the deferred tax asset is supported by forecasts of sufficient future taxable profits in the relevant jurisdictions. At 31 March 2026, the Group had not recognised any deferred tax asset in respect of tax losses of approximately £22.8m (2025: £23.2m). Deferred tax assets are not recognised where there is insufficient evidence that losses will be utilised. At 31 March 2026, a £0.8m deferred tax liability (2025: £1.8m) has been recognised for withholding taxes payable on the remittance of certain of the Group’s overseas subsidiaries’ unremitted earnings. The aggregate amount of unremitted earnings on which deferred tax has not been recognised is £27.6m (2025: £21.4m). No deferred tax has been recognised on this amount as the Group is able to control the timing of these distributions and is not expecting to distribute these profits in the foreseeable future.
0.1
1.3
– –
Increased recognition of historical losses Impact of tax rate changes on deferred tax
(0.5)
0.2
(0.4) (1.3)
Adjustments to deferred taxation expense in respect of prior years Adjustments to current taxation expense in respect of prior years Total tax reported in the consolidated Statement of Profit or Loss
(0.2)
(1.1)
7.1
7.4
174
175
discoverIE Group plc Innovative Electronics
Annual Report and Accounts for the year ended 31 March 2026
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