Annual Report & ACCOUNTS for the year ended 30 June 2014

HYR 2014

2014
£000
2013
£000
Current tax— UK corporation tax646675
— overseas tax at prevailing local rates6,0975,871
— adjustment in respect of prior years(910)(800)
Total current tax expense5,8335,746
Deferred tax— origination and reversal of temporary differences(2,428)(4,502)
— adjustment in respect of prior years(1,379)384
Total deferred tax expense(3,807)(4,118)
Total income tax expense in the Consolidated Income Statement — continuing operations2,0261,628
Tax on discontinued operations3962,539
Total income tax expense in the Consolidated Income Statement2,4224,167

The tax on the Group's profit before tax differs from the standard rate of UK corporation tax of 22.5% (2013: 23.75%). The differences are explained below:

2014
£000
2013
£000
Profit before taxation — continuing operations21,44212,478
Tax at 22.5% (2013: 23.75%)4,8242,964
Effect of:
— disallowable expenses98286
— innovation related tax credits(832)(39)
— differences on overseas tax rates331553
— adjustments in respect of prior years(2,289)(415)
— non-taxable foreign exchange gains(137)
— change in tax rates(106)(1,584)
Total income tax expense — continuing operations2,0261,628
Tax on discontinued operations3962,539
Total income tax expense in the Consolidated Income Statement2,4224,167

Tax Credit Recognised Directly in Equity

2014
£000
2013
£000
Deferred tax on effective portion of changes in fair value of cash flow hedges29(86)
Tax recognised in Consolidated Statement of Comprehensive Income29(86)
Corporation tax on equity settled transactions250152
Deferred tax on equity settled transactions(91)70
Total tax recognised in equity188136

The Budget on 20 March 2013 announced that the UK corporation tax rate will reduce to 20% by 2015. A reduction in the rate from 23% to 21% (effective from 1 April 2014) and 20% (effective from 1 April 2015) were substantively enacted on 2 July 2013.

The deferred tax balance at 30 June 2014 has been calculated based on the rate of 20% which was substantively enacted at the balance sheet date. The future rate reductions will affect the Group's future current tax charges.