b'96 Mercia Asset Management PLC Annual Report and Accounts 2021Notes to the consolidated financial statements continued10. Finance expenseYear ended Year ended31 March 31 March2021 2020000 000Interest on lease liabilities 20 26total interest expense 20 2611. TaxationYear ended Year ended31 March 31 March2021 2020000 000Corporation tax:Current yearDeferred tax credit (440) (159)(440) (159)The UK standard rate of corporation tax is 19% (2020: 19%). There is no current tax charge in the year (2020: nil). The deferred tax credit of 440,000 (2020: 159,000) represents the unwinding of the deferred tax liabilities recognised in respect of the intangible assets arising on the acquisition of Enterprise Ventures and the VCT fund management business.A reconciliation from the reported profit/(loss) to the total tax credit is shown below:Year ended Year ended31 March 31 March2021 2020000 000Profit/(loss) before taxation 34,018 (17,613)Tax at the standard rate of corporation tax in the UK of 19% (2020: 19%) 6,463 (3,347)Effects of:Income not subject to tax (6,938) (1,200)Expenses not deductible for tax purposes 193 3,181Other timing differences not recognised 282 1,366Unwinding of deferred tax liability (440) (159)total tax credit (440) (159)A deferred tax liability of 3,372,000 (2020: 3,812,000) continues to be recognised in respect of the intangible assets arising on the acquisition of the VCT fund management business in December 2019. At 31 March 2021, there is no deferred tax liability remaining in relation to the acquisition of the entire issued share capital of Enterprise Ventures in March 2016, due to the related intangible asset becoming fully amortised in March 2021 (2020: 54,000).A potential deferred tax asset of 5,722,000 (2020: 7,210,000) for cumulative unrelieved management expenses and other tax losses has not been recognised in these consolidated financial statements as it is not considered sufficiently probable that the Group will generate sufficient taxable profits from the same trade to recover these amounts in full.Changes to the UK corporation tax rate were substantively enacted on 24 May 2021. From 1 April 2023 the main corporation tax rate will increase to 25% from 19%. As the increased rate of 25% had not been substantively enacted at the balance sheet date, its effects are not included in these financial statements.'