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Tax (Tables)
 12 Months Ended
Mar. 31, 2020
Income Taxes [Abstract]  
Disclosure of major components of tax expense (income)
The tax charge/(credit) for the year can be analysed as follows:
 
2020

2019

2018

 
£m

£m

£m

Current tax:
 
 
 
UK corporation tax at 19% (2019: 19%; 2018: 19%)
179

132

200

UK corporation tax adjustment in respect of prior years
(4
)
(12
)
(18
)
 
175

120

182

Overseas corporation tax
(2
)
8

15

Overseas corporation tax adjustment in respect of prior years
(41
)
(40
)
(4
)
 
(43
)
(32
)
11

Total current tax from continuing operations
132

88

193

Deferred tax:
 
 
 
UK deferred tax
269

27

65

UK deferred tax adjustment in respect of prior years
6

2

(2
)
 
275

29

63

Overseas deferred tax
64

208

(1,155
)
Overseas deferred tax adjustment in respect of prior years
9

14

10

 
73

222

(1,145
)
Total deferred tax from continuing operations
348

251

(1,082
)
 
 
 
 
Total tax charge/(credit) from continuing operations
480

339

(889
)
Disclosure of tax charged/(credited) to the consolidated statement of comprehensive income and equity
Tax charged/(credited) to the consolidated statement of comprehensive income and equity
 
2020

2019

2018

 
£m

£m

£m

Current tax:




Available-for-sale investments
—

—

(11
)
Cash flow hedges, cost of hedging and own credit reserve
—

3

—

Share-based payments
—

—

(3
)
Deferred tax:



Available-for-sale investments
—

—

(18
)
Investments at fair value through other comprehensive income
(1
)
—

—

Cash flow hedges, cost of hedging and own credit reserve
(40
)
(12
)
(4
)
Remeasurements of pension assets and post-retirement benefit obligations¹
(206
)
12

530

Share-based payments
(3
)
—

1


(250
)
3

495

Total tax recognised in the statements of comprehensive income from continuing operations
(247
)
3

497

Total tax relating to share-based payments recognised directly in equity from continuing operations
(3
)
—

(2
)
 
(250
)
3

495

1.
Remeasurements of gains on pension assets and post-retirement benefit obligations for the year ended 31 March 2018 includes a deferred tax charge of £281 million arising on the reduction in the US corporation tax rate.
Disclosure of reconciliation of accounting profit multiplied by applicable tax rates and average effective tax rate
The tax charge/(credit) for the year for the continuing business, is higher (2019: lower tax charge; 2018: lower tax charge) than the standard rate of corporation tax in the UK of 19% (2019: 19%; 2018: 19%):
 
2020

2019

2018

 
£m

£m

£m

Profit before tax from continuing operations
 
 
 
Before exceptional items and remeasurements
2,346

2,489

2,500

Exceptional items and remeasurements
(592
)
(648
)
160

Profit before tax from continuing operations
1,754

1,841

2,660

Profit before tax from continuing operations multiplied by UK corporation tax rate of 19% (2019: 19%; 2018: 19%)
334

350

506

Effect of:
 
 
 
Adjustments in respect of prior years¹
(30
)
(36
)
(14
)
Expenses not deductible for tax purposes
29

28

21

Non-taxable income²
(18
)
(36
)
(26
)
Adjustment in respect of foreign tax rates
18

56

157

Deferred tax impact of change in UK tax rate
192

(3
)
(7
)
Deferred tax impact of change in US tax rate due to Tax Reform
—

—

(1,510
)
Adjustment in respect of post-tax profits of joint ventures and associates included within profit before tax
(17
)
(8
)
(9
)
Other³
(28
)
(12
)
(7
)
Total tax charge/(credit) from continuing operations
480

339

(889
)
 
 
 
 
 
%

%

%

Effective tax rate – continuing operations
27.4

18.4

(33.4
)
1.
Prior year adjustment is primarily due to agreement of prior period tax returns.
2.
Includes gains on chargeable disposals which are offset by previously unrecognised capital losses.
3.
Other primarily comprises a recognition of deferred tax on previously unrecognised capital losses and claims for land remediation relief.
Disclosure of temporary difference, unused tax losses and unused tax credits
The following are the major deferred tax assets and liabilities recognised, and the movements thereon, during the current and prior reporting periods:
 
Accelerated
tax
depreciation
£m

Share-
based
payments
£m

Pensions
and other
post-
retirement
benefits
£m

Financial
instruments
£m

Other net
temporary
differences1
£m

Total
£m

Deferred tax liabilities/(assets)
 
 
 
 
 
 
At 31 March 2018 (as previously reported)
4,874

(9
)
(203
)
21

(1,047
)
3,636

Impact of transition to IFRS 9 and IFRS 15
19

—

—

(5
)
(93
)
(79
)
At 1 April 2018 (as restated)
4,893

(9
)
(203
)
16

(1,140
)
3,557

Exchange adjustments and other²
275

—

(31
)
(3
)
(76
)
165

(Credited)/charged to income statement
309

—

52

6

(124
)
243

Charged/(credited) to other comprehensive income and equity
—

—

12

(12
)
—

—

At 1 April 2019
5,477

(9
)
(170
)
7

(1,340
)
3,965

Exchange adjustments and other²
210

(30
)
(28
)
(3
)
(27
)
122

(Credited)/charged to income statement
613

(7
)
44

(13
)
(287
)
350

Charged/(credited) to other comprehensive income and equity
—

(2
)
(206
)
(46
)
1

(253
)
At 31 March 2020
6,300

(48
)
(360
)
(55
)
(1,653
)
4,184

1.
The deferred tax asset of £1,653 million as at 31 March 2020 (2019: £1,340 million) in respect of other net temporary differences primarily relates to net operating losses of £547 million (2019: £423 million) and US environmental provisions of £529 million (2019: £409 million).
2.
Exchange adjustments and other comprises foreign exchange arising on translation of the US dollar deferred tax balances. It also includes reclassification of £29 million from other temporary differences to share-based payments.
Deferred tax assets in respect of some capital losses as well as trading losses and non-trade deficits have not been recognised as their future recovery is uncertain or not currently anticipated. The deferred tax asset not recognised relating to capital losses has increased due to remeasurement of opening deferred tax asset as a result of change in substantively enacted UK corporation tax rate from 17% to 19%. Hence the total deferred tax assets not recognised are as follows:
 
2020

2019

 
£m

£m

Capital losses
1,626

1,470

Non-trade deficits
1

4

Trading losses
6

5