The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as
reported in the profit and loss account because it excludes items of income or expense that are taxable or
deductible in other years and it further excludes items that are never taxable or deductible. The company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the
reporting end date.
Deferred tax
Full provision is made for deferred taxation resulting from timing differences between the recognition of
gains and losses in the accounts and their recognition for tax purposes. Deferred taxation is calculated on
an un-discounted basis at the tax rates which are expected to apply in the periods when the timing
differences will reverse.Income tax expense represents the sum of the tax currently payable and deferred tax.