127
FINANCIAL STATEMENTS
7 INCOME TAX continued Reconciliation of total income tax to the applicable tax rate
Year ended 31 December 2019 £m
Year ended 31 December 2018 £m
368.6
(85.5) (16.2)
Profit/(loss) on ordinary activities before tax
70.0
Income tax at 19% (2018: 19%)
Effects of: Expenses not deductible for tax purposes
1.1
1.0 0.1
(0.2) (0.3)
Rate change
Higher rate for overseas income Unrecognised deferred tax asset Losses utilised/carried back Adjustments in respect of prior periods Deferred tax not previously recognised Relief on Tier 1 interest included in equity
(0.3)
1.8
1.3
–
(0.1)
(3.4)
1.2
–
(9.1)
(3.2)
–
0.4
Other
0.9
Total income tax recognised in profit or loss
66.2
(21.2)
Income tax recognised in other comprehensive income
Year ended 31 December 2019 £m
Year ended 31 December 2018 £m
Deferred taxation Revaluation of land and buildings
– – –
0.9 0.9 0.9
Total deferred tax
Total income tax recognised in other comprehensive income
The tax adjustments in respect of prior periods represent agreements with HMRC in respect of prior years’ enquiries.
Taxation of life insurance companies was fundamentally changed following the publication of the Finance Act 2012. Since 1 January 2013, life insurance tax has been based on financial statements; prior to this date, the basis for profits chargeable to corporation tax was surplus arising within the Pillar 1 regulatory regime. Cumulative differences arising between the two bases, which represent the differences in retained profits and taxable surplus which are not excluded items for taxation, are brought back into the computation of taxable profits. However, legislation provides for transitional arrangements whereby such differences are amortised on a straight-line basis over a ten year period from 1 January 2013. Similarly, the resulting cumulative transitional adjustments for tax purposes in adoption of IFRS will be amortised on a straight-line basis over a ten year period from 1 January 2016. The tax charge for the year to 31 December 2019 includes profits chargeable to corporation tax arising from amortisation of transitional balances of £2.5m (2018: £2.5m). Tax balances included within these financial statements include the use of estimates and assumptions which are based on management’s best knowledge of current circumstances and future events and actions. This includes the determination of tax liabilities and recoverables for uncertain tax positions. The actual outcome may differ from the estimated position. 8 REMUNERATION OF DIRECTORS Information concerning individual Directors’ emoluments, interests and transactions is given in the Directors’ Remuneration Report. For the purposes of the disclosure required by Schedule 5 to the Companies Act 2006, the total aggregate emoluments of the Directors in the year was £2.7m (2018: £4.4m). Employer contributions to pensions for Executive Directors for qualifying periods were £nil (2018: £nil). The aggregate net value of share awards granted to the Directors in the year was £1.1m (2018: £2.7m). The net value has been calculated by reference to the closing middle-market price of an ordinary share at the date of grant. Two Directors exercised share options during the year with an aggregate gain of £0.3m (2018: two Directors exercised options with an aggregate gain of £5k).
9 STAFF NUMBERS AND COSTS The average number of persons employed by the Group (including Directors) during the financial year, analysed by category, was as follows:
Year ended 31 December 2019 Number
Year ended 31 December 2018 Number
7
Directors
9
118 955
Senior management
120
Staff
1,007 1,136
Average number of staff
1,080
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