Income tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year adjusted if necessary for disallowed expenses if appropriate. The company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax is recognised in the event of the net book value of assets exceeding their written down value for tax purposes at the balance sheet date at the current rate of Corporation Tax.