Income Taxes

12 Months Ended

Sep. 30, 2018

Income Tax Disclosure [Abstract]

Income Taxes

22. Income Taxes

The following comprises the loss before income taxes:

	September 30, 2018			September 30, 2017
UK	$	(18,939	)	$	(38,720	)
North America		(1,058	)		(5,906	)
Mainland Europe		(212	)		(5,450	)
South America		(205	)		1,146
Total loss before income taxes	$	(20,414	)	$	(48,930	)

The income tax expense consisted of the following for the periods ended September 30, 2018 and 2017:

	September 30, 2018		September 30, 2017
Income tax expense:
Current
UK	$	30	$	7
Mainland Europe		152		130
South America		—		47
Total current taxes	$	182	$	184

The net deferred tax assets and liabilities arising from temporary differences at September 30, 2018 and 2017 are as follows:

	September 30, 2018			September 30, 2017
Depreciation	$	32,091		$	35,915
Net operating losses		23,069			13,002
Other temporary differences		2,463			1,485
Total deferred tax assets		57,623			50,402
Valuation allowance balance		(54,855	)		(48,832	)
Net deferred tax assets		2,768			1,570
Deferred tax liabilities
Intangible assets		(971	)		(1,570	)
Other temporary differences		(1,797	)		—
Net deferred tax liabilities	$	—		$	—

The differences between the US statutory tax rate and our effective rate for the periods ended September 30, 2018 and 2017 are reflected in the following table:

	September 30, 2018			September 30, 2017
Statutory income tax		24.5	%		34.0	%
State taxes (net of federal)		4.9	%		1.9
Tax effect of permanent differences		8.4	%		2.8	%
ATCA interest disallowed		—	%		(3.3	)%
Effect of foreign taxes		(8.4	)%		(15.1	)%
Rate change		(9.0	)%		—	%
Valuation allowance		(21.3	)%		(20.7	)%
Effective income tax rate		(0.9	)%		(0.4	)%

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 Group has a total potential net deferred tax asset carried forward of $54,855 at September 30, 2018.

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 $54,855 as of September 30, 2018.

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 2014 to 2017 remain subject to examination by tax authorities and the Company’s foreign tax returns from 2012 to 2017 remain subject to examination by tax authorities.

In addition to the UK, the Group 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 period ended September 30, 2018 is $152.

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

On December 22, 2017 several significant changes to the U.S. tax code were signed into law under the Tax Cuts and Jobs Act (the “Act”). Included among such changes is a reduction of the US corporate tax rate from 35% to 21%. Most of the effective dates of provisions in the Act are based on tax years beginning after December 31, 2017. Accordingly, many of the related provisions should not impact the Company until the fiscal year beginning October 1, 2018. Nonetheless, the Company continues to evaluate the impact of the Act on the tax provision.

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.