v3.25.4
Tax (Tables)
 12 Months Ended
Dec. 31, 2025
Disclosure of income tax [Abstract]  
Schedule of Tax Charges
2025
£m
2024
£m
2023
£m
UK corporation tax:
Current tax on profit for the year
(1,367)
(1,159)
(1,301)
Adjustments in respect of prior years
86
89
51
(1,281)
(1,070)
(1,250)
Foreign tax:
Current tax on profit for the year
(139)
(122)
(101)
Adjustments in respect of prior years
(9)
3
3
(148)
(119)
(98)
Current tax expense
(1,429)
(1,189)
(1,348)
Deferred tax:
Current year
(504)
(307)
(583)
Adjustments in respect of prior years
29
2
(54)
Deferred tax (expense) credit
(475)
(305)
(637)
Tax expense
(1,904)
(1,494)
(1,985)
Schedule of Income Tax Charges The tax expense is made up as follows:
Tax (expense) credit attributable to policyholders
(219)
(137)
30
Shareholder tax expense
(1,685)
(1,357)
(2,015)
Tax expense
(1,904)
(1,494)
(1,985)
Schedule of Reconciliation of the Charge Resulting from Applying the Standard UK Corporation Tax Rate An explanation of the relationship between tax expense and accounting profit
is set out below.
Note 15: Tax continued
2025
£m
2024
£m
2023
£m
Profit before tax
6,661
5,971
7,503
UK corporation tax thereon
(1,665)
(1,493)
(1,763)
Impact of surcharge on banking profits
(167)
(157)
(305)
Non-deductible costs: conduct charges
(70)
(27)
(29)
Non-deductible costs: bank levy
(33)
(37)
(35)
Other non-deductible costs1
(72)
(73)
(52)
Non-taxable income1
99
51
76
Tax relief on coupons on other equity instruments
116
125
124
(Non-deductible) non-taxable foreign exchange (losses) gains1
(75)
27
(50)
Tax-exempt gains on disposals
62
98
35
Tax losses where no deferred tax recognised
(7)
(7)
(2)
Remeasurement of deferred tax due to rate changes
–
–
(14)
Differences in overseas tax rates
(5)
(9)
6
Policyholder tax in respect of the life assurance business
(71)
(75)
(61)
Deferred tax in respect of life assurance policyholder tax
(119)
(5)
84
Adjustments in respect of prior years
106
94
–
Tax effect of share of results of joint ventures
(3)
(1)
1
Provision for Pillar 2 current income taxes
–
(5)
–
Tax expense
(1,904)
(1,494)
(1,985)
1(Non-deductible) non-taxable foreign exchange gains (losses) on non-sterling denominated other equity instruments and on net investment hedging of subsidiaries, previously shown in
aggregate within other non-deductible costs and non-taxable income, are now presented as an individual line item. Comparatives are represented on a consistent basis.
Schedule of Statutory Position and Tax Disclosure The Group’s deferred tax assets and liabilities are as follows:
Statutory position
2025
£m
2024
£m
Tax disclosure
2025
£m
2024
£m
Deferred tax assets
3,990
5,005
Deferred tax assets
5,734
6,900
Deferred tax liabilities
(146)
(125)
Deferred tax liabilities
(1,890)
(2,020)
Net deferred tax asset at 31 December
3,844
4,880
Net deferred tax asset at 31 December
3,844
4,880
Schedule of Movements in Deferred Tax Liabilities and Assets Movements in deferred tax assets and liabilities (before taking into consideration the offsetting of balances within the same taxing
jurisdiction) can be summarised as follows:
Deferred tax assets
Tax
losses
£m
Property,
plant and
equipment
£m
Provisions
£m
Long-term
assurance
business
£m
Share-
based
payments
£m
Pension
liabilities
£m
Derivatives
£m
Asset
revaluations1
£m
Other
temporary
differences
£m
Total
£m
At 1 January 2024
4,783
248
221
233
58
47
1,667
50
102
7,409
Charge to the income statement
(133)
(75)
(22)
(167)
(1)
(9)
(63)
–
(10)
(480)
(Charge) credit to other comprehensive
income
–
–
–
–
–
–
(9)
16
–
7
Transfer to disposal group
–
–
–
(13)
–
–
–
–
–
(13)
Other charge to equity
–
–
–
–
(23)
–
–
–
–
(23)
At 31 December 2024
4,650
173
199
53
34
38
1,595
66
92
6,900
(Charge) credit to the income statement
(401)
(81)
(58)
(53)
2
(5)
37
(29)
(1)
(589)
Credit (charge) to other comprehensive
income
–
–
35
–
–
–
(659)
(7)
–
(631)
Other credit to equity
–
–
–
–
54
–
–
–
–
54
At 31 December 2025
4,249
92
176
–
90
33
973
30
91
5,734
In 2024, deferred tax assets of £13 million were reclassified as disposal group assets and presented within other assets (see note 24).
Note 15: Tax continued
Deferred tax liabilities
Property,
plant and
equipment
£m
Capitalised
software
enhancements
£m
Long-term
assurance
business
£m
Acquisition
fair value
£m
Pension
assets
£m
Derivatives
£m
Other
temporary
differences
£m
Total
£m
At 1 January 2024
–
(92)
–
(352)
(971)
(708)
(258)
(2,381)
(Charge) credit to the income statement
–
(31)
–
124
3
164
(85)
175
Credit to other comprehensive income
–
–
–
–
154
–
22
176
Exchange and other adjustments
–
–
–
–
–
–
10
10
At 31 December 2024
–
(123)
–
(228)
(814)
(544)
(311)
(2,020)
(Charge) credit to the income statement
(45)
33
(73)
32
2
154
11
114
Credit to other comprehensive income
–
–
–
–
85
–
–
85
Acquisitions
–
–
–
(72)
–
–
–
(72)
Exchange and other adjustments
–
–
5
–
–
–
(2)
3
At 31 December 2025
(45)
(90)
(68)
(268)
(727)
(390)
(302)
(1,890)
1Financial assets at fair value through other comprehensive income.