9. Income tax

The major components of income tax expense for the years ended 31 December 2008 and 2007 are:

Consolidated income statement	2008 £m	2007 £m
Current income tax
Current income tax charge	73.2	61.8
Adjustment in respect of prior years	(3.1)	(3.0)
Deferred income tax
Origination and reversal of temporary differences	(8.8)	6.6
Adjustment in respect of prior years	(0.5)	(2.9)
	60.8	62.5

Consolidated statement of recognised income and expense	2008 £m	2007 £m
Deferred income tax related to items (credited)/charged directly to equity
Current income tax deduction on exercise of stock options in excess of share based payments	(17.6)	(10.0)
Deferred income tax on cash flow hedges	5.6	1.6
Deferred income tax movement in relation to share based payments	2.2	5.8
Deferred income tax movement in relation to actuarial (losses)/gains on defined benefit plans	(13.5)	7.6
	(23.3)	5.0

A reconciliation between tax expense and the product of accounting profit multiplied by the UK corporation tax rate for the years ended 31 December 2008 and 2007 is as follows:

	2008 £m	2007 £m
Accounting profit before tax	226.6	228.7
Notional charge at UK corporation tax rate of 28.5% (2007: 30%)	64.6	68.6
Adjustments in respect of current income tax of prior years	(3.1)	(3.0)
Adjustments in respect of deferred tax of prior years	(0.5)	(2.9)
Non-deductible expenses	2.4	1.8
Attributable to lower tax rates in overseas jurisdictions	(2.6)	(1.5)
Attributable to reduction in corporation tax rate	–	(0.5)
At the effective tax rate of 26.8% (2007: 27.3%)	60.8	62.5
Total tax expense reported in the income statement	60.8	62.5

The tax charge for the year ended 31 December 2008 was £60.8m (2007: charge of £62.5m) and is after a prior year net credit of £3.1m resulting from the successful resolution of issues with relevant tax authorities. The tax charge is equivalent to an underlying effective tax rate of 26.8% (2007: 27.3%). The effective tax rate on profit before amortisation and callable swaps valuation is 27.0% (2007: 27.7%). In addition, a net tax credit of £23.3m has been credited directly to equity including a credit of £17.6m in respect of realised stock option gains which resulted in a corresponding reduction in cash tax liabilities for the year ended 31 December 2008.

Deferred income tax

Deferred income tax at 31 December relates to the following:

	2008 £m	2007 £m	2008 £m	2007 £m
	Consolidated balance sheet		Consolidated income statement
Deferred tax liabilities
Accelerated capital allowances	(5.7)	(4.6)	1.3	3.2
Pension scheme’s asset	–	(5.7)	0.4	–
Cash flow hedges	(7.2)	(1.6)	–	–
Fair value adjustments on acquisition	(22.7)	(12.6)	(4.8)	(3.3)
	(35.6)	(24.5)
Deferred tax assets
Share based payments	16.1	15.7	(2.6)	(0.8)
Pension schemes’ liability	6.9	4.5	5.0	5.4
Provisions	6.7	5.0	(1.5)	(1.1)
Losses available for offset against future taxable income	–	0.7	1.8	0.3
Cash flow swaps	8.9	–	(8.9)	–
	38.6	25.9
Net deferred tax asset	3.0	1.4
Deferred income tax expense			(9.3)	3.7

The Group has tax losses which arose in the UK of £5.8m (2007: £11.0m) that are available for offset against future taxable profits of the companies in which the losses arose. Deferred tax assets have not been recognised in respect of £5.8m (2007: £8.5m) of these losses, as their recoverability is uncertain.