Diageo plc – Half year report – 31 December 2017
Industry: food and drink
For the six months ended 31 December 2017, the £77 million taxation charge (2016 – £436 million) comprises a UK tax charge of £64 million (2016 – £60 million) and a foreign tax charge of £13 million (2016 – £376 million).
The exceptional tax credit of £360 million ($475 million) resulted from applying the TCJA enacted on 22 December 2017 in the United States. The credit principally arises on remeasuring the deferred tax liabilities in respect of intangibles and other assets for the change in the US Federal tax rate from 35% to 21%. In addition, there is a one off charge of £11 million ($15 million) to other comprehensive income, in respect of the remeasurement of deferred tax assets on post employment benefits and on share-based incentive plans as a result of applying the provisions of TCJA.
The TCJA is complex and wide ranging and whilst every attempt has been made to reflect the impact within these financial statements, the impact has been estimated and may be further refined prior to 30 June 2018.