10. Taxation

Taxation charge based on profits for the year

The major components of income tax expense are:

2014
£000
2013*
£000
Current income tax from continuing operations
UK corporation tax at 22.8% (2013: 23.9%)4,2044,070
Adjustments in respect of prior periods(146)(242)
4,0583,828
Deferred income tax from continuing operations
UK origination and reversal of timing differences(629)135
Adjustments in respect of prior periods(85)(138)
Impact of change in tax rates(850)(317)
(1,564)(320)
Income tax expense from continuing operations reported in the consolidated income statement2,4943,508
The tax charge is analysed between:
Tax on profit from continuing operations before special items3,6113,132
Tax on special items relating to continuing operations(267)(376)
Special tax item — deferred tax credit as a result of the UK Corporate rate change(850)
Special tax item — deferred tax charge as a result of change of use of industrial building752
2,4943,508
Tax on items taken to equity from continuing and discontinued operations
Current tax:
Exchange movements recognised in reserves24
Share-based payments(446)(121)
(446)(97)
Deferred tax:
Actuarial gains and losses on pension scheme2,429(1,961)
Share-based payments(125)(260)
Cash flow hedges38
Impact of change in tax rates334210
2,638(1,973)
Total tax charged/(credited) to equity2,192(2,070)

* Restated (see note 1).

Reconciliation between tax expense and the Group's profit on ordinary activities before taxation

The reconciliation of the UK statutory tax charge to the Group's profit on ordinary activities before taxation is as follows:

2014
£000
2013*
£000
Profit before tax from continuing operations16,14014,395
Taxation charge at UK corporation tax rate of 22.8% (2013: 23.9%)3,6803,440
Adjustments in respect of prior periods(258)(380)
Tax effect of non-deductible or non-taxable items91140
Rate change adjustment(317)
Deferred tax on share-based payments(101)(127)
Movement in unprovided deferred tax(68)
Special tax item — rate change adjustment(850)
Special tax item — deferred tax charge as a result of change of use of industrial building752
2,4943,508

* Restated (see note 1).

Factors affecting future tax charge

In July 2013 the UK Government enacted the reductions in the main rate of Corporation Tax from 23% to 21% from 1 April 2014 and to 20% from 1 April 2015. Therefore, the UK deferred tax assets and liabilities included within these financial statements have been provided at a rate of 20%.

Unrecognised tax losses

The Group has capital losses which arose in the UK of £27,313,000 (2013: £27,313,000) that are available for offset against future chargeable gains in the UK group. Deferred tax assets have not been recognised in respect of these losses as it is not reasonably foreseeable that these will be utilised.

Deferred tax assets of £1,727,298 (2013: £1,783,000) in respect of pre-acquisition losses in The Medical House carried forward have not been recognised due to insufficient certainty over their recoverability. Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes relate to the same fiscal authority.

Deferred tax

GroupCompany
2014
£000
2013
£000
2014
£000
2013
£000
Deferred tax liabilities
Accelerated tax depreciation(5,283)(6,429)15
(5,283)(6,429)15
Deferred tax assets
Tax losses7,1908,0645,4636,282
Less not recognised(7,190)(8,064)(5,463)(6,282)
Tax losses recognised
Share-based payments1,2261,184846847
Provisions21214510295
Other timing differences1134
Retirement benefit obligations4152,706
1,8544,048948946
Net deferred tax (liability)/asset(3,429)(2,381)963946
Assets963946
Liabilities(3,429)(2,381)
Net deferred tax (liability)/asset(3,429)(2,381)963946
Provision for deferred tax
At 1 May(2,381)(7,545)946527
Credit/(charge) to the income statement:
— Retirement benefit obligations200
— Provisions112(27)2282
— Share-based payments8812769180
— Accelerated capital allowances163(350)14(3)
— Derivatives(11)(62)(129)
— Intangible assets188198
Impact of change in tax rates — income statement850317(72)(19)
Impact of change in tax rates — equity(334)14(73)(22)
(Charge)/credit to equity(2,304)2,02857330
Disposal of subsidiaries2,919
At 30 April(3,429)(2,381)963946

The amount of deferred tax liability likely to be settled within 12 months is £1.0m (2013: £0.8m). Deferred tax assets in the Company are recognised on the basis that their reversal in the future will generate current period losses which will be surrendered to subsidiary undertakings in exchange for payment at the prevailing tax rate.