7. Tax The actual tax charge differs from the expected tax charge computed by applying the standard UK corporation tax rate of 25% (2025 – 25)%, as analysed below: | | | | | | | Half year ended | | | 30 June | | 30 June | | | 2026 | | 2025 | | | £m | | £m | Profit before tax | | 4,318 | | 3,585 | | | | | | Expected tax charge | | (1,080) | | (896) | Losses and temporary differences in period where no deferred tax assets recognised | | (3) | | (4) | Foreign profits taxed at other rates | | 4 | | 21 | Items not allowed for tax: | | | | | - losses on disposals and write-downs | | (6) | | 5 | - UK bank levy | | (17) | | (17) | - regulatory and legal actions | | (3) | | (16) | - other disallowable items | | (24) | | (14) | Non-taxable items: | | | | | - FX recycling on Ulydien capital reduction | | 22 | | — | - RPI-related uplift on index-linked gilts | | 17 | | 9 | - other non-taxable items | | 5 | | 15 | Taxable foreign exchange movements | | 1 | | (3) | Unrecognised losses bought forward and utilised | | 23 | | 18 | Net increase in the carrying value of deferred tax assets in respect of UK losses | | — | | 26 | Banking surcharge | | (110) | | (95) | Tax on paid-in equity dividends | | 37 | | 40 | Adjustments in respect of prior years | | (4) | | 1 | Actual tax charge | | (1,138) | | (910) |
At 30 June 2026, NatWest Group has recognised a deferred tax asset of £1,149 million (31 December 2025 - £1,252 million) and a deferred tax liability of £376 million (31 December 2025 - £104 million). These amounts include deferred tax assets recognised in respect of trading losses of £741 million (31 December 2025 - £814 million). NatWest Group has considered the carrying value of these assets as at 30 June 2026 and concluded that they are recoverable. Deferred tax liabilities of £299 million relate to the net identifiable assets acquired as part of the Evelyn Partners acquisition (refer to Note 2 for further information).
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