Income Taxes

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Income Taxes

23. Income Taxes

The following comprises the loss before income taxes:

	December 31,			December 31,			September 30,
	2019			2018			2018
	(in millions)
UK	$	(23.3	)	$	(3.7	)	$	(18.9	)
North America		(15.2	)		(0.8	)		(1.1	)
Mainland Europe		1.9			0.3			(0.2	)
South America		(0.3	)		(0.5	)		(0.2	)
Total loss before income taxes	$	(36.9	)	$	(4.7	)	$	(20.4	)

The income tax expense consisted of the following:

	Year Ended December 31,		Three Months Ended December 31,		Year Ended September 30,
	2019		2018		2018
	(in millions)
Income tax expense:
Current
UK	$	—	$	—	$	—
Mainland Europe		0.1		—		0.2
South America		—		—		—
Total current taxes	$	0.1	$	—	$	0.2

The net deferred tax assets and liabilities arising from temporary differences are as follows:

	December 31,			September 30,
	2019			2018
	(in millions)
Depreciation	$	41.8		$	32.1
Net operating losses		23.5			23.1
Other temporary differences		4.5			2.5
Total deferred tax assets		69.8			57.7
Valuation allowance balance		(65.7	)		(54.9	)
Net deferred tax assets		4.1			2.8
Deferred tax liabilities
Intangible assets		(2.5	)		(1.0	)
Other temporary differences		(1.6	)		(1.8	)
Net deferred tax liabilities	$	—		$	—

The differences between the US statutory tax rate and our effective rate are reflected in the following table:

	December 31,			December 31,			September 30,
	2019			2018			2018
Statutory income tax		21.0	%		21.0	%		24.5	%
State taxes (net of federal)		3.3	%		6.5	%		4.9	%
Tax effect of permanent differences		(9.8	)%		6.9	%		8.4	%
Effect of foreign taxes		(1.5	)%		(3.7	)%		(8.4	)%
True ups		3.2	%		(6.3	)%
Rate change		(0.5	)%		(14.2	)%		(9.0	)%
Valuation allowance		(15.9	)%		(11.4	)%		(21.3	)%
Effective income tax rate		(0.2	)%		(1.2	)%		(0.9	)%

The valuation allowance on deferred tax assets has been determined by considering all available evidence, both positive and negative, in order to ascertain whether it is more likely than not that carried forward deferred tax assets will be realized. The Company has a total potential net deferred tax asset carried forward of $65.7 million at December 31, 2019.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considered the scheduled reversal of deferred income tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on the consideration of these items, management determined that it is more likely than not that the Company will not realize the deferred income tax asset balances and therefore, recorded a full valuation allowance of $65.7 million as of December 31, 2019.

Currently, there are no U.S. federal, state or foreign jurisdiction tax audits pending. The Company's corporate U.S. federal and state tax returns from 2016 to 2018 remain subject to examination by tax authorities and the Company's foreign tax returns from 2012 to 2018 remain subject to examination by tax authorities.

In addition to the UK, the Company is subject to taxation in the US, and in certain foreign jurisdictions (primarily in Europe), where the total of non-UK taxes payable for the year ended December 31, 2019 is $23.1 thousand.

The Company has not recognized deferred tax liabilities in respect of unremitted earnings that are considered indefinitely reinvested in foreign subsidiaries.

The utilization of the Company's pre-Merger net operating losses is subject to a limitation due to the "change of ownership provisions" under Section 382 of the Internal Revenue Code and similar state provisions.