BT HAS paid the latest installment to its pension deficit programme nine months early in order to qualify for the tax deductible corporation tax rate of 28 per cent, rather than the 26 per cent rate that will apply from April.
BT says the decision to pay £505m into the BT Pension Scheme, the actuarial value of the £525m due to have been paid in December, made financial sense. The timing of the tax deduction will also be brought forward to the first-half of the upcoming financial year.
BT, which has agreed to pay £525m a year for the first three years of its 17-year recovery plan, said the early payment would not affect the group’s previously announced outlook for free cash flow.
The first two payments were made in December 2009 and December 2010. The next payment was due in December 2011.
BT’S pension deficit, which stood at £9bn in 2009, fell by £2.9bn last year thanks to recent changes in inflation calculations.