Income Taxes

The Company recorded an income tax benefit of $15.2 million, $2.6 million, $7.3 million and $3.7 million for the year ended December 31, 2019, the three months ended December 31, 2018, and the years ended September 30, 2018 and 2017, respectively.

A reconciliation of income tax expense (benefit) at the statutory corporate income tax rate to the income tax expense (benefit) at the Company’s effective income tax rates is as follows (in thousands):



	Year ended December 31,			Three months ended December 31,			Year ended September 30,
	2019			2018			2018			2017
Net loss before taxes	$	(139,008	)	$	(23,253	)	$	(52,031	)	$	(23,380	)
U.K. statutory tax rate	19.0		%	19.0		%	19.0		%	19.5		%
Income tax benefit at U.K. statutory tax rate	(26,411		)	(4,423		)	(9,886		)	(4,559		)
Tax incentives / credits	(16,312		)	(3,234		)	(7,296		)	(3,702		)
Non-deductible expenses	4,048			127			1,553			609
Adjustments in respect of prior years	96			265			(13		)	13
Operating losses	21,643			3,605			7,317			3,754
Tax on property, plant, equipment and intangibles	267			140			233			113
Other, net	1,510			915			812			119
Total income tax benefit	$	(15,159	)	$	(2,605	)	$	(7,280	)	$	(3,653	)
Current income tax benefit	(14,749		)	(2,605		)	(7,280		)	(3,653		)
Deferred income tax benefit	(410		)	—			—			—

Effective rate of income tax	10.9		%	11.2		%	14.0		%	15.6		%

The effective tax rates in the above table for the year ended December 31, 2019, the three months ended December 31, 2018, and the years ended September 30, 2018 and 2017 is lower than the main rate of U.K. tax primarily due to administration of the U.K. research and development tax credit, which is included within the tax incentive/credits line in the table above.

Deferred tax assets and liabilities consisted of the following at December 31, 2019 and 2018 (in thousands):



	December 31,
	2019			2018
Deferred tax assets:
Other differences	$	1,522		$	2,870
Tax losses	19,624			7,851
Fixed assets	896			621
Total deferred tax assets	22,042			11,342
Valuation allowances	(21,632		)	(11,342		)
Net deferred tax asset (liability)	$	410		$	—

Deferred tax assets resulting from loss carry forwards, fixed assets and retirement benefits, with total deferred tax assets increasing by $10.7 million in 2019. The Company has recorded a valuation allowance against the net deferred tax asset where the recoverability due to future taxable profits is unknown. The $0.4 million deferred tax asset balance is related to the Company's U.S. entity.

At December 31, 2019, the Company had U.K. trading losses carry forward of $115.4 million. These losses are carried forward indefinitely under local law, but are subject to numerous utilization criteria and restrictions.

As required by the authoritative guidance on accounting for income taxes, the Company evaluates the realizability of deferred tax assets at each reporting date. Accounting for income taxes guidance requires that a valuation allowance be established when it is more likely than not that all or a portion of the deferred tax assets will not be realized. In circumstances where this is sufficient negative evidence indicating that the deferred tax assets are not more likely than not realizable, the Company establishes a valuation allowance. The Company recorded valuation allowances in the amounts of $21.6 million and $11.3 million at December 31, 2019 and 2018, respectively.