Notes to the consolidated financial statements
7. Taxation continued
(f) Deferred tax
The deferred tax included in the income statement is as follows:
| Year to 31.3.2009 £m |
Year to 31.3.2008 £m |
|
| Accelerated capital allowances | 134.3 | (18.0) |
| Intangible asset | – | (1.3) |
| Shared-based payments | – | (0.1) |
| Provisions | – | 0.5 |
| Deferred grant income | (1.7) | (0.5) |
| Retirement benefits | 0.5 | 6.1 |
| Losses carried forward | (0.3) | 0.8 |
| Fair value adjustment on previous business combinations | (0.2) | (1.1) |
| Other | (0.1) | – |
| 132.5 | (13.6) |
The deferred tax included in the balance sheet is as follows:
| Year to 31.3.2009 £m |
Year to 31.3.2008 £m |
|
| Deferred tax assets: | ||
| Provisions | 1.2 | 1.2 |
| Deferred income | 58.9 | 57.2 |
| Retirement benefits | 34.2 | – |
| Losses available for offset against future taxable income | 5.1 | 4.8 |
| Interest rate swaps | 3.3 | – |
| Share-based payments | 0.2 | 0.2 |
| Cash flow hedges | 1.0 | 1.1 |
| Other | 0.3 | 0.2 |
| Deferred tax asset | 104.2 | 64.7 |
| Deferred tax liabilities: | ||
| Accelerated capital allowances | 671.4 | 537.1 |
| Intangible asset | 18.0 | 18.0 |
| Fair value adjustment on previous business combinations | 11.3 | 11.5 |
| Retirement benefits | – | 23.5 |
| Deferred tax liability | 700.7 | 590.1 |
| Net deferred tax liability | 596.5 | 525.4 |
(g) Factors that may affect future tax charges
The Group expects to continue to incur high levels of capital expenditure and be able to claim tax relief in excess of depreciation for the remainder of NWL’s current regulatory period. The annual excess has been falling mainly because, since 1 April 2005, tax deductions for deferred revenue expenditure are claimed on a depreciation basis (as originally set out in HM Revenue and Customs’ Tax Bulletin 53).
In addition to abolition of industrial buildings allowances, future capital allowances claims will be made at the revised rates introduced by the Finance Act 2008. The main changes being a reduction in the rate of allowance for items of general plant and machinery from 25% to 20% per annum and an increase in the rate for long life assets from 6% to 10% per annum with effect from 1 April 2008.