Annual report pursuant to Section 13 and 15(d)

Income taxes (Tables)

v3.19.3.a.u2
Income taxes (Tables)
12 Months Ended
Dec. 31, 2019
Income taxes  
Schedule of loss before income taxes

Loss before income taxes is as follows (in thousands):

Year ended

December 31, 

    

2019

    

2018

    

United States

$

(494)

$

(1,650)

United Kingdom

(136,429)

(93,367)

Loss before income taxes

$

(136,923)

$

(95,017)

Schedule of components of income tax expense (benefit)

The components of income tax expense are as follows (in thousands):

Year ended

December 31, 

    

2019

    

2018

    

United States:

Federal

$

242

$

400

State and local

97

United Kingdom

Total current tax expense

242

497

United States:

Federal

State and local

United Kingdom

Total deferred tax expense

Total income tax expense

$

242

$

497

Schedule of deferred tax assets and liabilities

As of December 31, 2019 and 2018 the tax effects of temporary differences and carryforwards that give rise to deferred tax assets and liabilities were as follows (in thousands):

December 31, 

December 31, 

    

2019

    

2018

Deferred tax liabilities

Property, plant and equipment

$

(1,251)

$

(1,415)

Right-of-use assets

(2,364)

Other

(79)

Total

(3,694)

(1,415)

Deferred tax assets

Share-based compensation expense

9,941

8,020

Intangibles

1,413

575

Operating lease liabilities

2,550

Net operating loss and expenditure credit carryforwards

48,837

33,310

Other

125

286

Total

62,866

42,191

Valuation allowance

(59,172)

(40,776)

3,694

1,415

Net deferred tax asset (liability)

$

$

Schedule of movements in deferred tax valuation allowance

The movements in the deferred tax valuation allowance for the year ended December 31, 2019 and 2018 is as follows (thousands):

2019

    

2018

Valuation allowance at January 1

$

40,776

$

27,433

Impact of adopting ASC 606

(1,469)

Valuation allowance at January 1, restated

40,776

25,964

Increase in valuation allowance

16,961

16,659

Foreign currency translation adjustments

1,435

(1,847)

Valuation allowance at December 31

$

59,172

$

40,776

Schedule of the effective tax rate reconciliation

Reconciliation of the U.K. statutory income tax rate to the Company's effective tax rate is as follows (in percentages):

Year ended

December 31, 

    

2019

    

2018

    

U.K. tax rate

19.0

%  

19.0

%  

Reimbursable tax credits within Research and development expense

2.8

%  

3.5

%  

R&D expenditures surrendered for R&D tax credit refund

(7.7)

%  

(10.0)

%  

Permanent differences for unrealized foreign exchange on intercompany loans of a long-term investment nature

(1.5)

%  

%  

Change in valuation allowances

(12.4)

%  

(17.5)

%  

Difference in tax rates

(1.2)

%  

(1.3)

%  

R&D tax credits generated

1.5

%

5.1

%

Other

(0.7)

%  

0.8

%  

Effective income tax rate

(0.2)

%  

(0.5)

%