| 2017
£m | 2016
£m |
| Current taxation – charge for the year | 28.1 | 24.9 |
| Current taxation – adjustments in respect of previous years | (6.3) | 2.2 |
| Deferred tax (see note 19) | (2.1) | (2.2) |
| 19.7 | 24.9 |
The Group has chosen to use a weighted average country tax rate rather than the UK tax rate for the reconciliation of the charge for the year to the profit before taxation per the consolidated income statement. The Group operates in several jurisdictions, many of which have a tax rate in excess of the UK tax rate. As such, a weighted average country tax rate is believed to provide the most meaningful information to the users of the financial statements. The appropriate tax rate for this comparison is 30.09% (2016: 32.36%).
As part of the calculation of the tax charge, the Group recognises a number of tax risk provisions in respect of ongoing tax inquiries and in recognition of the multinational tax environment that Bodycote operates in where the nature of the tax positions that are taken is often complex and subject to change.
The charge for the year can be reconciled to the profit before taxation per the consolidated income statement as follows:
| 2017
£m | 2016
£m |
| Profit before taxation | 117.0 | 91.9 |
| Tax at the weighted average country tax rate of 30.09% (2016: 32.36%) | 35.2 | 29.7 |
| Tax effect of expenses not deductible in determining taxable profit1 | 0.4 | (0.4) |
| Impact of recognition or derecognition of deferred tax balances | (1.4) | 2.1 |
| Effect of long-term capital financing2 | 0.7 | (1.0) |
| Tax effect of other adjustments in respect of previous years: | | |
| Current tax3 | (7.0) | 2.2 |
| Deferred tax3 | 4.3 | (0.6) |
| Effect of financing activities between jurisdictions2 | (9.2) | (7.2) |
| Impact of trade and minimum corporate taxes | 1.3 | 1.1 |
| Impact of US Tax Cuts and Jobs Act treated as an exceptional item4 | (6.4) | – |
| Effect of changes in statutory tax rates on deferred tax assets and liabilities | (0.1) | (1.2) |
| Other tax risk provision movements | 1.9 | 0.2 |
| Tax expense for the year | 19.7 | 24.9 |
Tax on items taken directly to equity is a credit of £0.5m (2016: £1.0m).
- Those costs in various territories not deductible in calculating taxable profits.
- The Group is externally financed by a mix of cash flows from operations, short-term borrowings, long-term loans and finance leases. Internally, operating subsidiaries are predominantly financed via intercompany loans. The charge includes provisions based on management's estimation of tax risk.
- 2017 prior year adjustments in current and deferred tax relate to changes in assumptions and outcomes in relation to overseas tax credits and other claims, whilst the 2016 adjustments mainly relate to changes in overseas pensions assumptions.
- Net exceptional impact of the passing of the Tax Cuts and Jobs Act in the US in December 2017, made up of (i) £6.8m one-off tax gain resulting from a revaluation of the Group's US deferred tax liabilities, and (ii) £0.4m tax charge on accumulated overseas profits of US entities.