Notes to the consolidated financial statements

7. Taxation continued

(b) Tax relating to items charged or credited to equity

	Year to 31.3.2009   £m	Year to 31.3.2008   £m
Current tax:
Current tax recycled to income statement on cash flow hedges	(0.1)	–
Deferred tax:
Actuarial gains and losses on pension schemes	(58.2)	7.6
Deferred tax recycled to income statement on cash flow hedges	0.1	–
Interest rate swaps	(3.3)	–
Share-based payment	–	0.2
Tax (credit)/charge in the statement of recognised income and expense	(61.5)	7.8

(c) Reconciliation of the total tax charge

	Year to 31.3.2009 £m	Year to 31.3.2008 £m
Accounting profit before tax	152.7	170.3
Accounting profit multiplied by standard rate of corporation tax (28%) (2008: 30%)	42.8	51.1
Effects of:
Expenses not deductible for tax purposes	3.6	3.0
Depreciation in respect of non-qualifying items	0.9	0.8
Non-taxable income and enhanced tax reliefs	(0.1)	(0.6)
Non-taxable amortisation of financing items	(1.6)	(1.8)
Refinancing of infrastructure assets	1.6	(7.7)
Adjustment to tax charge in respect of prior periods	0.5	4.0
Other	(0.3)	(0.3)
	47.4	48.5
Effect of changes in tax rates and laws:
– Impact of Industrial Buildings Allowances abolition	117.2	–
Impact of rate reduction on deferred tax:
– Restatement of opening balance	–	(35.4)
– Movement in the year	–	(1.1)
Total tax expense reported in the income statement	164.6	12.0

The effective tax rate for the year to 31 March 2009 was 107.8% (2008: 7.0%). The increase of 100.8% is mainly due to the impact of the abolition of Industrial Buildings Allowances (IBA), the restatement of deferred tax in 2008 and the refinancing of certain infrastructure assets. In the absence of the IBA adjustment, the effective rate would have been 31.0%.

(d) Unrecognised tax losses

The Group has tax losses of £8.2 million (2008: £8.7 million) which have arisen in its Gibraltar subsidiary for which a deferred tax asset has not been recognised as they may not be used to offset taxable profits elsewhere in the Group and it is not expected that the subsidiary will utilise significant amounts in the foreseeable future. The losses are, however, available for offset against future taxable profits without time limit.

(e) Temporary differences associated with Group investments

At 31 March 2009, there was no recognised deferred tax liability (2008: £nil) for taxes that would be payable on the unremitted earnings of the Group’s subsidiaries as the Group has determined that undistributed profits of its subsidiaries will not be distributed in the foreseeable future. The temporary difference associated with investments in subsidiaries for which a deferred tax liability has not been recognised aggregate to £10.9 million (2008: £8.5 million).