Electrocomponents sees one-off credit from Trump tax changes

Electrocomponents expects changes to US tax law to trigger a one-off credit this year followed by a reduced overall tax rate.

The distributor of semiconductors, cables and other electronic parts said President Trump's tax overhaul would have little effect on its effective tax rate for the year to 31 March. But it expects an unspecified non-cash exceptional tax credit from the revaluation of deferred tax balances.

The US changes will reduce the group's effective tax rate to the mid-twenties from 28% in the current year. The FTSE 250 group joins Royal Dutch Shell, BP and Barclays in guiding investors on the likely impact of the changes. Those companies predicted one-off charges of £1bn or more from revaluing deferred tax assets and liabilities before long-term gains.

Electrocomponents said: "We continue to work through the full impact of these changes on Electrocomponents and will give more detailed guidance on the impact of these changes at our final results in May."

Last month the US Senate passed the most far-reaching changes to the country's tax code since the 1980s. The divisive package, proposed by Trump, includes cutting corporation tax to 21% from 35%. Trump has argued his measures will encourage growth and create jobs but critics have said they will benefit companies and wealthy individuals over ordinary citizens.