2025 | 2024 | |
|---|---|---|
UK corporation tax | 3,839 | 2,485 |
Overseas tax | 299 | (387) |
Adjustment for tax in respect of prior years | (1,354) | 431 |
Total current tax | 2,784 | 2,529 |
Deferred tax* | (5,460) | 379 |
Income tax expense | (2,676) | 2,908 |
* The deferred tax credit was generated by an initial recognition of a deferred tax asset in the USA and Polish subsidiaries of £1,505k and £3,712k respectively. These were in respect of tax losses and tax relief for which there was not previously sufficient certainty of future profits to allow recognition.
Factors affecting the tax charge
The weighted average applicable tax rate for the Group is 21.8% (2024: 20.1%). The main elements of the income tax expense are as follows:
2025 | 2024 | |
|---|---|---|
Tax reconciliation |
| |
Profit before tax | 19,963 | 153 |
Tax at the UK tax rate of 25% (2024: 25%) | 4,991 | 38 |
Effects of: | ||
Expenses not deductible for tax purposes | 361 | 359 |
(Utilisation of) tax losses for which no deferred income tax asset recognised | (451) | 4,026 |
Effect of different overseas tax rates | (328) | 695 |
Recognition of share-based payments and related assets | (6) | 246 |
Special Economic Zone relief | (794) | (264) |
Deferred tax losses on which no deferred tax had been previously recognised | (5,184) | – |
Adjustments to prior year UK corporation tax charge | (1,265) | (555) |
Impairments booked in subsidiaries | – | (1,637) |
Income tax expense | (2,676) | 2,908 |
The main rate of UK corporation tax (CT) substantively enacted for the whole period was 25% (2024: 25%).
The deferred taxation balances have been measured at the 25% rate. The UK government's Corporate Tax Roadmap commits to capping CT at 25% for the remainder of this parliament, i.e. until 2029.
The Group has not identified any uncertain tax positions as at 31 December 2025 (2024: none).