| Income tax credit |
7. Income tax credit
Schedule of detailed information about components of income tax expense
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Year ended December 31,
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Year ended December 31,
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Year ended December 31, |
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2022 |
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2021 |
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2020 |
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£ |
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£ |
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£ |
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| Current tax |
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| Corporation tax credit |
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1,720,000 |
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1,407,542 |
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1,171,928 |
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| Total current tax credit |
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1,720,000 |
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1,407,542 |
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1,171,928 |
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| Reconciliation of loss before tax to the tax credit for the year |
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| Loss before tax |
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3,109,706 |
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14,983,467 |
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6,629,844 |
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| Loss on ordinary activities multiplied by the standard rate of tax of 19% (2021: 19%
and 2020: 19%) |
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590,844 |
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2,846,859 |
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1,259,670 |
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| Adjustments in respect of prior years |
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154,422 |
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- |
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- |
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| Non-deductible expenses |
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(1,834,581 |
) |
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(1,641,974 |
) |
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(4,556 |
) |
| Super deductions |
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13,178 |
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- |
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- |
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| Deferred tax movement on unrecognized fixed asset differences |
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- |
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(103,418 |
) |
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(157,728 |
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| Deferred tax movement on unrecognized timing differences |
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(671,566 |
) |
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42,462 |
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2,660 |
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| Deferred tax movement on share-based payments |
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- |
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- |
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(152,895 |
) |
| Deferred tax asset not recognized |
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(186,879 |
) |
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(342,227 |
) |
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(278,753 |
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| Additional allowance in respect of enhanced R&D relief |
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4,198,115 |
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1,042,213 |
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868,918 |
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| Surrender of tax losses for R&D tax credit refund |
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(2,109,111 |
) |
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(1,843,915 |
) |
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(1,537,316 |
) |
| R&D tax credits generated |
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1,565,578 |
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1,407,542 |
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1,171,928 |
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| Current tax credit |
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1,720,000 |
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1,407,542 |
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1,171,928 |
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Included
within corporation tax receivable are research and development tax credits of £Nil (2021: £Nil and 2020: £5,485) which
are included within other income.
Factors
affecting future tax
On
May 24, 2021, the U.K. 2021 Finance Bill was substantively enacted and subsequently received Royal Assent on June 10, 2021. Under
this bill, the rate of U.K. corporation tax will increase to 25%
in 2023, with lower rates and tapered relief to be applied to companies with profits below £250,000.
If
the Group’s deferred tax balances at the period end were remeasured at 30% this would result in the unrecognized deferred tax asset
increasing by £886,660.
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