Annual Review 2007/2008

Taxation

a. Analysis of charge for the period

The charge for the year is based on a rate of corporation tax of 30% (2007: 30%).

  2008
£m
2007
£m
UK corporation tax 0.1 0.1  
Total current tax charge 0.1 0.1  

b. Factors affecting the tax charge

The BBC World Service taxation charge is based primarily on interest receivable. The tax assessed for the year is therefore signi√ěcantly lower than the standard rate of corporation tax in the UK (30%), as explained below.

  2008
£m
2007
£m
Surplus before taxation 0.2 11.7  
Surplus before taxation multiplied by the standard rate of corporation tax in the UK of 30% (2007 30%) 0.1 3.5  
Effect of non-taxable external income/deductible costs - (3.4 )
Total current tax charge 0.1 0.1  

c. Future tax charges

BBC World Service anticipates a similar tax charge in future years as Grant-in-Aid, the principal component of BBC World Service's income, is not subject to taxation.