Taxation for the year compromises current and deferred tax. Tax is recognised in the Statement of Income and Retained Earnings, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.
Current or deferred taxation assets and liabilites are not discounted.
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet dates.
Deferred tax
Deferred tax is recognised in respect of all timing difference that have orginated but not reversed at the balance sheet date.
Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of timing difference.
Unrelieved tax losses and other deferred tax assets are recognised only to tthe extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.