b'Annual Report & Accounts 2022 Mercia Asset Management PLC 9110. TaxationYear ended Year ended31 March 31 March2022 2021000 000Current taxUK corporation tax (706) Deferred taxOrigination and reversal of temporary timing differences 508 440Effects of changes in tax rates (1,064) Total tax (charge)/credit (1,262) 440The UK standard rate of corporation tax is 19% (2021: 19%). The deferred tax credit of 508,000 (2021: 440,000) represents the unwinding of the deferred tax liabilities recognised in respect of the intangible assets arising on the acquisition of the VCT fundFinancial statementsmanagement business.A reconciliation from the reported profit to the total tax (charge)/credit is shown below:Year ended Year ended31 March 31 March2022 2021000 000Profit before taxation 27,362 34,018Tax at the standard rate of corporation tax in the UK of 19% (2021: 19%) (5,199) (6,463)Effects of:Income not subject to tax 4,039 6,938Expenses not deductible for tax purposes (314) (193)Share of partnership profits (513) Remeasurement of deferred tax for changes in tax rates 252 Other timing differences not recognised 473 158Total tax (charge)/credit (1,262) 440An increase in the UK corporation tax rate from 19% to 25%, with effect from 1 April 2023, was substantively enacted on 24 May 2021. The Groups deferred tax liability has been calculated at a rate of 25% as at 31 March 2022 (2021: 19%).A deferred tax liability of 3,928,000 (2021: 3,372,000) continues to be recognised in respect of the intangible assets arising on the acquisition of the VCT fund management business in December 2019.A potential deferred tax asset of 4,442,000 (2021: 5,722,000) for cumulative unrelieved management expenses and other tax losses has not been recognised in these consolidated financial statements as their future use is uncertain.'