Tax (Tables)

12 Months Ended

Dec. 31, 2023

Text Block [Abstract]

Summary of Tax on (loss)/Profit

Tax on profit/(loss)

	United Kingdom			Other jurisdictions			Total
	2023  $m	2022  $m	2021  $m	2023  $m	2022  $m	2021   $m	2023  $m	2022  $m	2021  $m
Current tax
Current period	16	6	1	245	177	138	261	183	139
Adjustments in respect of prior periods	–	(2)	–	12	(5)	4	12	(7)	4
	16	4	1	257	172	142	273	176	143
Deferred tax
Origination and reversal of temporary differences	1	(1)	(7)	(21)	(6)	(14)	(20)	(7)	(21)
Changes in tax rates and tax laws	–	–	(25)	2	–	–	2	–	(25)
Adjustments to unprovided or unrecognised deferred taxa	–	(2)	2	5	–	–	5	(2)	2
Adjustments in respect of prior periods	1	2	1	(1)	(5)	(4)	–	(3)	(3)
	2	(1)	(29)	(15)	(11)	(18)	(13)	(12)	(47)
Income tax charge/(credit) for the yearb	18	3	(28)	242	161	124	260	164	96

a Represents a reassessment of the recovery of deferred taxes in line with the Group’s profit forecasts.

b ‘Other jurisdictions’ includes $172m (2022: $134m, 2021: $112m) in respect of US taxes.

Summary of Reconciliation of Tax Charge Including Gain on Disposal of Assets

Reconciliation of tax charge

	2023  %	2022  %	2021  %
Tax at UK blended rate	23.5	19.0	19.0
Tax credits	(0.5)	(0.1)	(0.1)
System Funda	(1.3)	3.1	0.4
Foreign exchange gains	(1.0)	(0.9)	–
Other permanent differencesb	0.9	0.5	1.4
Non-recoverable foreign taxes	1.3	3.5	3.5
Net effect of different rates of taxc	1.5	6.3	6.8
Effect of changes in UK tax rates and lawsd	–	–	(7.0)
Effects of substantive enactment of UAE tax rates and lawse	(0.9)	–	–
Effect of changes in other tax rates and laws	0.2	0.1	–
Reduction in current tax expense by previously unrecognised deferred tax assets	–	–	(0.1)
Items on which deferred tax arose but where no deferred tax is recognisedf	0.2	1.2	2.0
Effect of adjustments to unprovided or unrecognised deferred taxesg	0.5	(0.4)	0.5
Adjustment to tax charge in respect of prior periodsh	1.3	(1.9)	0.2
	25.7	30.4	26.6

a The System Fund is, in general, not subject to taxation.

b  Includes (0.6) percentage points (2022: (1.0) percentage points, 2021: (0.7) percentage points) in respect of the US Foreign-derived intangible income regime.

c Includes 1.3 percentage points (2022: 6.9 percentage points, 2021: 7.1 percentage points) driven by the relatively high blended US rate, which includes US Federal and State taxes.

d  In 2021, the UK Government enacted an increase to the UK rate of Corporation Tax from 19% to 25%.

e  During 2023, law implementing a new corporate income tax regime was substantively enacted in the UAE. This resulted in the recognition of a deferred tax asset of $9m in the UAE. Absent further law change, this benefit is not likely to reoccur.

f  Predominantly in respect of losses arising in the year.

g Entirely in respect of adjustments relating to estimated recoverable deferred tax assets other than 2023. In 2023, includes 0.7 percentage points respectively relating to the provision of previously unprovided deferred tax liabilities which arise on temporary differences in subsidiaries.

h  Relates to the finalisation of tax returns, activity from tax authorities such as tax audits and the reassessment of provisions for uncertain tax positions.

Summary of Tabular Form of Taxes Paid Based on Geographical Area

	2023 $m		2022 $m		2021 $m
Chinaa		5		10		3
UK		8		3		(2	)
USb		171		165		68
Other jurisdictions		22		11		1
		206		189		70
Taxes withheld at source		37		22		16
Tax paid per cash flow		243		211		86

a Tax payments are typically based upon the previous year’s profits.

b  Includes refunds in respect of earlier periods of $nil (2022: $nil, 2021: $15m).

Summary of Reconciliation of Tax Paid to Total Current Tax Charge in Income Statement

A reconciliation of tax paid to the total current tax charge in the Group income statement is as follows:

	2023 $m			2022 $m			2021 $m
Current tax charge in the Group income statement		273			176			143
Current tax credit in the Group statement of comprehensive income		(6	)		(2	)		–
Current tax credit taken directly to equity		(5	)		–			–
Total current tax charge		262			174			143
Movements to tax contingenciesa		(2	)		10			(4	)
Timing differences of cash tax paid and foreign exchange differencesb		(17	)		27			(53	)
Tax paid per cash flow		243			211			86

a Tax contingency movements are included within the current tax charge but do not impact cash tax paid in the year. Settlements of tax contingencies are included within cash tax paid in the year but not recorded in the current year tax charge.

b  2021 included $20m of refunds in respect of earlier years, $12m of other receivables which have been allocated to payments that otherwise would have been due and $28m of payments due in 2022.

Summary of Deferred Tax

Deferred tax

		Property, plant, equipment and software $m		Application fees $m	Deferred gains on loan notes $m	a	Associates $m		Losses $m	b	Employee benefits $m		Deferred compensation $m	Expected credit losses on trade receivables $m		Intangible assets excluding software $m		Other short-term temporary differences $m	c,d	Total $m
At 1 January 2022		(81	)	40	(34	)	(55	)	84		39		48	20		(16	)	9		54
Group income statement		32		1	–		(4	)	5		1		4	(5	)	(21	)	(1	)	12
Group statement of comprehensive income		–		–	–		–		(1	)	(6	)	–	–		–		8		1
Group statement of changes in equity		–		–	–		–		–		1		–	–		–		–		1
Exchange and other adjustments		(4	)	–	–		–		(9	)	(3	)	–	(1	)	(3	)	–		(20	)
At 31 December 2022		(53	)	41	(34	)	(59	)	79		32		52	14		(40	)	16		48
Group income statement		22		1	–		(1	)	–		2		2	(3	)	(9	)	(1	)	13
Group statement of comprehensive income		–		–	–		–		(6	)	–		–	–		–		(5	)	(11	)
Group statement of changes in equity		–		–	–		–		–		6		–	–		–		–		6
Exchange and other adjustments		1		–	–		–		3		1		–	–		3		2		10
At 31 December 2023		(30	)	42	(34	)	(60	)	76		41		54	11		(46	)	12		66

a Become due in 2025 unless prevailing law at that time allows further deferral.

b Wholly in respect of revenue losses.

c  No balances exceeding $20m are contained within ‘Other short-term temporary differences’.

d  Primarily in respect of contract costs, right-of-use assets, lease liabilities and expenses for which tax relief has not yet been obtained.

Summary of Deferred Tax Balance After Offset of Assets and Liabilities and Analysis by Key Territory

The analysis of the deferred tax balance after considering the offset of assets and liabilities within entities where there is a legal right to do so and an analysis of the deferred tax balance showing all territories with balances greater than $10m in either the current or prior year are as follows:

	2023 $m				2022 $m
Deferred tax assets		134				126
Deferred tax liabilities		(68	)			(78	)
		66				48
Analysed as:
United Kingdom		113				109
United States		(53	)			(73	)
Other		6				12
		66				48

Summary of Unrecognised Deferred Tax Position

The total unrecognised deferred tax position is as follows:

			Gross		Unrecognised deferred tax
	2023 $m		2022 $m		2023 $m		2022 $m
Revenue losses		450		430		79		78
Capital losses		580		549		146		138
		1,030		979		225		216
Tax credits		32		25		32		25
Othera		16		31		5		8
		1,078		1,035		262		249

a  Primarily relates to costs incurred for which tax relief has not been obtained.

Summary of Unrecognized Deferred Tax Based on Expiry Date

There is no expiry date to any of the above unrecognised assets other than for the losses and tax credits as shown in the table below:

			Gross		Unrecognised deferred tax
Expiry date	2023 $m		2022 $m		2023 $m		2022 $m
2023		–		1		–		–
2024		6		4		1		1
2025		11		9		2		1
2026		7		18		1		4
2027		7		3		1		–
2028		6		–		1		–
2029		10		10		10		10
After 2030		22		18		22		16