Trump’s tax cuts net Balfour Beatty £20m

Balfour Beatty took a hit this week when the liquidation of its joint venture partner Carillion meant it could lose up to £45m on big road projects.

But the UK-based international infrastructure group received good news, too, in the form of a £20m boost to its bottom line thanks to US President Donald Trump.

Trump’s Tax Cuts and Jobs Act, which he signed into law as a Christmas gift to business on 22 December, cut US corporate income tax rates from 35% to 21%.

Balfour Beatty said today this will lead to a reduction in the effective tax rate on its US earnings from around 40% to 26% in 2018 and beyond.

Its preliminary assessment of the implications show it can expect a boost of around £20m based on the net deferred tax liabilities at the end of 2016.

Balfour Beatty called this a "non-underlying one-off non-cash credit from the revaluation of US deferred tax liabilities".

In other good news, it said directors’ valuation of the Investments portfolio will increase by approximately £95m as a result of this reduced tax rate on US assets.

The firm cautioned that the tax reforms "are subject to further guidance and interpretations from the US Authorities", but it was confident enough to announce the savings before the group’s 2017 full year results statement on 14 March.

Image: President Donald Trump addressing the February 2017 Conservative Political Action Conference (CPAC) in National Harbor, Maryland (Gage Skidmore/Wikimedia Commons)

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