Silence Therapeutics plc Income Taxes Disclosure
18. Income taxes
The Group operates in the U.K. and is subject to income taxes in that jurisdiction. The U.K. tax rate applied for 2025 was 25% (25% for 2024). U.K. deferred tax assets and liabilities have been measured at a rate of 25%. The entire tax expense relates to current tax as shown below. No deferred tax was recognized in the year.
Income (loss) from continuing operations before income taxes:
|
|
Year ended December 31, |
|
|
|
|
2025 |
|
|
|
|
$000s |
|
|
(Loss)/Income from continuing operations: |
|
|
|
|
UK |
|
|
(89,679 |
) |
Foreign |
|
|
1,078 |
|
Total |
|
|
(88,601 |
) |
The significant components of income tax expense attributable to income from continuing operations for the years ended December 31, 2025 and December 31, 2024 are as follows:
|
|
Year ended December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
|
|
$000s |
|
|
$000s |
|
||
Current Tax Expense |
|
|
|
|
|
|
||
Current Year |
|
|
11 |
|
|
|
845 |
|
Changes in estimate related to prior years |
|
|
- |
|
|
|
- |
|
Total current tax |
|
|
11 |
|
|
|
845 |
|
Deferred Tax Expense |
|
|
|
|
|
|
||
Origination and reversal of temporary differences |
|
|
- |
|
|
|
- |
|
Recognition of previously unrecognized tax losses |
|
|
- |
|
|
|
- |
|
Recognition of previously unrecognized tax losses (derecognition of |
|
|
- |
|
|
|
- |
|
Taxation |
|
|
11 |
|
|
|
845 |
|
Income tax expense (benefit) attributable to income (loss) from continuing operations for the year ended December 31, 2025 differed from the amounts computed by applying the statutory UK federal income tax rate of 25 percent to pretax income (loss) from continuing operations as a result of the following:
|
|
Year Ended December 31, |
|
|||||
|
|
2025 |
|
|
% |
|
||
|
|
$000s |
|
|
|
|
||
UK Statutory Income Tax (Benefit) at 25% |
|
|
(22,150 |
) |
|
|
25.00 |
% |
Domestic Federal |
|
|
|
|
|
|
||
Tax credits |
|
|
(1,948 |
) |
|
|
2.20 |
% |
Changes in valuation allowance |
|
|
14,857 |
|
|
|
-16.77 |
% |
Non-taxable and non-deductible items |
|
|
|
|
|
|
||
Stock Compensation |
|
|
1,726 |
|
|
|
-1.95 |
% |
Research and Development costs |
|
|
7,881 |
|
|
|
-8.89 |
% |
Other reconciling items |
|
|
(108 |
) |
|
|
0.12 |
% |
Foreign tax effects |
|
|
|
|
|
|
||
Other foreign jurisdictions |
|
|
(269 |
) |
|
|
0.30 |
% |
Total |
|
|
(11 |
) |
|
|
0.01 |
% |
Reconciliation of the income tax credit at standard rate of U.K. corporation tax to the current tax credit for the year ended December 31, 2024 is as follows:
|
|
Year Ended December 31, |
|
|
|
|
2024 |
|
|
|
|
$000s |
|
|
Loss before tax |
|
|
(44,464 |
) |
|
|
|
|
|
UK Statutory Income Tax (Benefit) at 25% |
|
|
11,116 |
|
Income not taxable |
|
|
3,356 |
|
Foreign Tax Rate Differential |
|
|
308 |
|
Change in valuation allowance |
|
|
(15,423 |
) |
Effect of overseas taxes |
|
|
(202 |
) |
Total |
|
|
(845 |
) |
A schedule of income taxes paid by jurisdiction is as follows:
|
|
2025 |
|
|
|
|
$000s |
|
|
UK Federal |
|
|
— |
|
Foreign |
|
|
|
|
Germany |
|
|
637 |
|
Other |
|
|
— |
|
Total |
|
|
637 |
|
The Group did not have any deferred tax liabilities as at December 31, 2025 and 2024. Components of the Group’s deferred tax assets as at December 31, 2025 and 2024 are as follows:
|
|
Year ended December 31, |
|
|||||
|
|
Gross |
|
|
Gross |
|
||
|
|
2025 |
|
|
2024 |
|
||
|
|
$000s |
|
|
$000s |
|
||
Deferred tax assets: |
|
|
|
|
|
|
||
Trading Losses 1 |
|
|
73,529 |
|
|
|
55,316 |
|
Share-based payments |
|
|
4,233 |
|
|
|
3,663 |
|
Capital losses |
|
|
2,651 |
|
|
|
2,467 |
|
Gross deferred tax asset |
|
|
80,413 |
|
|
|
61,446 |
|
Valuation allowance |
|
|
(80,413 |
) |
|
|
(61,446 |
) |
Total deferred tax, net |
|
|
- |
|
|
|
- |
|
Movements in deferred tax valuation allowance:
|
|
Year ended December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Valuation allowance at January 1 |
|
|
61,446 |
|
|
|
63,739 |
|
Increase/(decrease) in valuation allowance |
|
|
18,967 |
|
|
|
(2,293 |
) |
Valuation allowance at December 31 |
|
|
80,413 |
|
|
|
61,446 |
|
Management has reviewed cumulative tax losses and projections of future taxable losses and determined that it is not more likely than not that they will be realized. Accordingly, valuation allowances have been provided over deferred tax assets.
Since the Group does not have an establishment or place of business in China, the Group is subject to withholding tax on gross income from dividends, interest, lease of property, royalties, and other China-source passive income. In 2021 the Group entered into a collaboration agreement with Hansoh, a biopharmaceutical company in China. In 2024 the Group received a milestone payment of $2.0 million, which required withholding tax of $0.2 million. We did not receive a milestone in 2025.
During the year, the Group had not yet received the research and development tax credit related to the prior year. The Group has recognized $7.5 million in respect of the current year for unfunded projects that are permissible to claim under the SME scheme (2024: $13.2). In addition, in 2024 we have also recognized $0.3 million related to the RDEC scheme which is not applicable for 2025.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 5, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.