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Deferred income tax
 12 Months Ended
Dec. 31, 2022
Text block [abstract]  
Deferred income tax
13. Deferred income tax
 
                                                                                  
       
All figures in £ millions
           
2022
    
2021
  
       
Deferred income tax assets
            
 
57
 
  
 
57
 
       
Deferred income tax liabilities
   
 
 
 
   
 
(37
) 
  
 
(40
)   
       
Net deferred income tax asset/(liability)
   
 
 
 
   
 
20
 
  
 
17
 
Substantially all of the deferred income tax assets are expected to be recovered after more than one year.
Deferred income tax assets and liabilities shall be offset when there is a legally enforceable right to offset current income tax assets with current income tax liabilities and where the deferred income taxes relate to the same fiscal authority.
At 31 December 2022, the Group has gross tax losses for which no deferred tax asset is recognised of £547m (2021: £721m). The expiry date and key geographic split of these losses is set out in the following table.
    
    
    
 
     
    
Gross
     
Tax effected
  
                 
Year ended 31 December 2022
   
                      UK
     
                      US
     
                      Other
     
                      Total
     
                      UK
     
                      US
     
                      Other
     
                      Total
  
                 
Tax losses expiring:   
 
 
 
   
 
 
 
   
 
 
 
   
 
 
 
   
 
 
 
   
 
 
 
   
 
 
 
   
 
 
 
                 
Within 10 years      –        3        30     
 
33
 
      –        –        10     
 
10
 
                 
Within
10-20
years		      –        104        –     
 
104
 
      –        5        –     
 
5
 
                 
Available indefinitely      166        30        214     
 
410
 
      41        2        68     
 
111
 
                 
Total
      166        137        244     
 
547
 
      41        7        78     
 
126
 
 
     
    
Gross
     
Tax effected
  
                 
Year ended 31 December 2021
   
                      UK
     
                      US
     
                      Other
     
                      Total
     
                      UK
     
                      US
     
                      Other
     
                      Total
  
                 
Tax losses expiring:
   
 
 
 
   
 
 
 
   
 
 
 
   
 
 
 
   
 
 
 
   
 
 
 
   
 
 
 
   
 
 
 
                 
Within 10 years
   
 
–
 
   
 
9
 
   
 
27
 
   
 
36
 
   
 
–
 
   
 
–
 
   
 
10
 
   
 
10
 
                 
Within
10-20
years
   
 
–
 
   
 
297
 
   
 
–
 
   
 
297
 
   
 
–
 
   
 
14
 
   
 
–
 
   
 
14
 
                 
Available indefinitely
   
 
166
 
   
 
86
 
   
 
136
 
   
 
388
 
   
 
41
 
   
 
5
 
   
 
49
 
   
 
95
 
                 
Total
   
 
166
 
   
 
392
 
   
 
163
 
   
 
721
 
   
 
41
 
   
 
19
 
   
 
59
 
   
 
119
 
The reduction in unrecognised tax attributes in the US has been impacted by two factors. Firstly certain US tax attributes have now been recognised, however, due to uncertainty over recoverability have been provided against. Offsetting this is the
de-recognition
of certain state tax losses following changes in the forecast profitability of US legal entities. The increase in unrecognised tax losses in other territories is primarily due to foreign exchange and additional losses incurred across territories which have incurred losses either in the ordinary course of trade or as a result of wind down activities.
Other gross deductible temporary differences for which no deferred tax asset is recognised total £218m (2021: £22m). This includes £193m in respect of interest limitations, with the increase from 2021 due to changes in the forecast profitability of certain US legal entities. The amount of temporary differences associated with subsidiaries for which no deferred tax has been provided totals £275m (2021: £229m).
In the UK March Budget 2021, the Government announced that from 1 April 2023 the UK corporation tax rate will increase to 25%, and this was substantively enacted on 24 May 2021. UK deferred tax balances have been remeasured at the enacted rate.
Deferred income tax assets of £14m (2021: £19m) have been recognised in countries that reported a tax loss in either the current or preceding year. This primarily arises in Brazil in respect of tax deductible goodwill and tax losses. It is considered more likely than not that there will be sufficient future taxable profits to realise these assets.
The recognition of the deferred income tax assets is supported by management’s forecasts of the future profitability of the relevant countries. In some cases deferred income tax assets are forecast to be recovered through taxable profits over a period that exceeds five years. Management consider these forecasts are sufficiently reliable to support the recovery of the assets. Where there are insufficient forecasts of future profits, deferred income tax assets have not been recognised.
The movement in deferred income tax assets and liabilities during the year is as follows:
 
                 
All figures in £ millions
   
        Trading
losses
     
        Accruals and
other
provisions
    
        Retirement
benefit
obligations
    
          Deferred
revenue
     
    Goodwill and
intangibles
    
Interest
        limitations
    
                Other
    
                Total
  
                 
Deferred income tax assets/(liabilities)
                                                                   
                 
At 1 January 2021
   
 
47
 
   
 
35
 
  
 
(49
) 
  
 
45
 
   
 
(209
) 
  
 
76
 
  
 
25
 
  
 
(30
) 
                 
Exchange differences
   
 
–
 
   
 
(1
) 
  
 
–
 
  
 
–
 
   
 
(2
) 
  
 
–
 
  
 
2
 
  
 
(1
) 
                 
Acquisition of subsidiaries
   
 
1
 
   
 
–
 
  
 
–
 
  
 
–
 
   
 
4
 
  
 
–
 
  
 
–
 
  
 
5
 
                 
Income statement benefit/(charge)
   
 
34
 
   
 
30
 
  
 
2
 
  
 
7
 
   
 
29
 
  
 
(21
) 
  
 
35
 
  
 
116
 
                 
Tax charge in OCI
   
 
–
 
   
 
–
 
  
 
(61
) 
  
 
–
 
   
 
–
 
  
 
–
 
  
 
(12
) 
  
 
(73
) 
                 
At 31 December 2021
   
 
82
 
   
 
64
 
  
 
(108
) 
  
 
52
 
   
 
(178
) 
  
 
55
 
  
 
50
 
  
 
17
 
                 
Exchange differences
   
 
–
 
   
 
7
 
  
 
2
 
  
 
6
 
   
 
(21
) 
  
 
6
 
  
 
4
 
  
 
4
 
                 
Acquisitions and disposals of subsidiaries
   
 
7
 
   
 
–
 
  
 
–
 
  
 
–
 
   
 
(21
) 
  
 
–
 
  
 
(12
) 
  
 
(26
) 
                 
Income statement benefit/(charge)
   
 
37
 
   
 
(4
) 
  
 
(9
) 
  
 
5
 
   
 
14
 
  
 
(6
) 
  
 
(7
) 
  
 
30
 
                 
Tax charge in OCI / equity
   
 
4
 
   
 
–
 
  
 
(12
) 
  
 
–
 
   
 
–
 
  
 
–
 
  
 
3
 
  
 
(5
) 
                 
At 31 December 2022
   
 
130
 
   
 
67
 
  
 
(127
) 
  
 
63
 
   
 
(206
) 
  
 
55
 
  
 
38
 
  
 
20
 
Other deferred income tax items include temporary differences in respect of
right-of-use
assets (deferred tax asset of £66m, with an offsetting deferred tax liability of £50m), accelerated capital allowances (£13m) and share-based payments (£9m).
As at 31 December 2022, no deferred income tax assets or liabilities were classified as held for sale (2021: £nil).