REFS is
a mine of invaluable information for the private investor.
Selecting shares without its help is like trying to
clap with one hand tied behind your back.
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Tax
rate
The tax rate
shows the effective overall rate of taxation provided against
reported pre-tax profit (i.e. against the unadjusted FRS3 pre-tax
profit). It therefore takes account not just of U.K. Corporation
Tax, but of deferred tax, overseas taxation, double taxation
relief, and any unrelieved ACT write-offs.
Prior year
tax adjustments are included within the total tax charge when
calculating the overall tax rate; these relate to under- or
over-provisions in previous years, and are regarded as being
of a recurring nature whose effects cancel out over time.
Any share
of results of associated companies is ignored for the purposes
of this calculation, which is performed as follows:
Step 1:
TOTAL
TAX CHARGE (UNADJUSTED FRS3)
- SHARE OF
TAX ON RESULTS OF ASSOCIATES
= TAX CHARGE
EXCLUDING ASSOCIATES
Step 2:
PRE-TAX
PROFIT (UNADJUSTED FRS3)
- SHARE OF
PRE-TAX RESULTS OF ASSOCIATES
= PRE-TAX
PROFIT EXCLUDING ASSOCIATES
Step 3:
TAX
CHARGE EXCL. ASSOCIATES
-----------------------------------------
X 100 = TAX RATE (%)
PRE-TAX PROFITS
EXCL. ASSOCIATES
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