Dickupham's Post ....13 Jun 2023 19:42
Nitro - it doesn't work as you confidently state it does. HBR doesn't get to choose anything in regard of the tax charged on its profits.
HBR recorded a profit before tax in the year to 31/12/2022 of $2.462bn. Profit after tax amounted to $8m. The tax charge (or expense) in HBR's accounts was explained as follows:
"Harbour's tax expense increased in 2022 to $2,454 million (2021: $213 million), primarily driven by the introduction of the EPL.
The tax expense is split between a current tax expense of $706 million (2021: $192 million), which includes an EPL current tax charge of $326 million, and a deferred tax expense of $1,748 million (2021: $21 million). Of the deferred tax expense, $1,469 million relates to a one-off non-cash deferred tax charge due to the introduction of the EPL of which $148 million reversed in the period. This arises because the deferred UK tax position on our balance sheet has been revalued from 40 per cent to 75 per cent where relevant to reflect the increase in our future tax rate in the period to March 2028. The total tax charge therefore includes a total of $1,647 million in relation to the EPL.
The effective tax rate is 100 per cent (2021: 68 per cent) materially higher than the blended standard UK tax rate for the period of 55 per cent. This increase is driven by the one off deferred tax charge associated with the introduction of the EPL partially offset by the profits from our international assets being subject to a lower tax rate".
The uplift in the deferred tax liability from 40% to 75% was a once-off charge that should reverse over the period the asssets on which tax relief was claimed are amortised. In future years, subject to increases/decreases in the balance of deferred tax in HBR's balance sheet (calculated at 75%) tax payable will be 75% of UK profits, together with a lesser % in most other territories in which HBR has operations.
On balance I prefer y11's views on the matter. At least he can spell. "Your" is an adjective, not a verb.
Talking of the "accountancy" you say "its all in" (again, "its" is an adjective, not a verb) I spent a career in it, the last 20 years as a partner in one of the so-called "Big 4" firms. Fee free to call me out on my take of HBR's reported tax position.
Your choice.
dyor
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