BT licks lips over £154m deferred tax credit
Surprise cut in tax in this year's Budget headline rate gives BT a welcome £154m boost
British Telecom will be shedding a corporation tax burden of £154m next year
as a result of the surprise cut in tax in this year’s Budget headline rate.
Advisers had indicated that large groups would seek to bring forward tax
liabilities to benefit from the low rate, with BT the first to disclose such a
large credit.
In its quartely statement, BT said: ‘A specific tax credit of £154m (£nil
last year) has been recognised for the re-measurement of deferred tax balances
for the change in the UK statutory corporation tax rate to 28%, which becomes
effective in 2008/09.’ A BT source said that its underfunded pension scheme was
a surprise factor in the deferred tax boost. In terms of deferred tax the fund’s
deficit position is treated as a deferred tax asset.