This document sets out the Group’s strategy for managing its tax affairs. The document will be published externally, on an annual basis in accordance with UK legislation.
Overall responsibility for the Tax Strategy rests with the Board.
The detailed policies for implementing the Tax Strategy are set out in the Group’s Tax Policy document. Responsibility for updating and implementing the Tax Policy rests with the Chief Financial Officer.
The Audit Committee monitors compliance with the Tax Strategy and reports / makes recommendations to the Board accordingly.
The Tax Strategy is kept under ongoing review and is subject to formal review by the Board at least once a year.
The Group’s strategy with regards to tax is:
to ensure the Group is fully compliant with its statutory, regulatory and reporting obligations - ensuring complete and accurate tax returns are filed and the correct amount of tax is paid on time;
to manage its tax costs by ensuring that tax is considered when the group carries out significant transactions or reorganizations, and that appropriate steps are implemented, which accords with the Group’s long term business strategy and stakeholder expectations;
to ensure the group utilizes statutory tax reliefs which are available to businesses generally (such as R&D tax credits or Patent/Innovation Box benefits). With specific regard to tax reliefs made available to help mitigate the impact of the COVID-19 pandemic, the Group gives due consideration to its reputation and both corporate and social responsibilities in its decision making process;
to ensure tax risks are appropriately identified, assessed and managed; and
to ensure stakeholders have a comprehensive understanding of the Group’s tax position.
The Group’s tax strategy is fully consistent with the CBI’s tax principles for UK business (attached).
Further details are set out below.
Where the application of tax law is unclear, the Group will obtain appropriate professional advice which will support the position taken in the relevant tax return.
The Group will develop good working relationships and be fully open, honest and transparent in its dealings with HMRC in the UK and other tax authorities. The Group will aim to meet with HMRC on a formal basis at least annually to update them on business developments and significant ongoing / forthcoming projects. The Group will cooperate fully with enquiries raised by tax authorities and will respond in a timely manner to requests for information.
The Group is committed to managing its tax costs as part of its strategy to maximize total shareholder returns.
All tax planning undertaken must be driven by a business purpose or commercial rationale and support the Group’s business objectives, which may include the reduction or elimination of double taxation. The Group will only enter into transactions which are fully justifiable in the event of scrutiny by the Group’s wider stakeholders.
The Group will be fully open, honest and transparent with tax authorities with regards to all tax planning undertaken.
Tax risks will be managed in accordance with the Group’s risk management framework and procedures. This includes the maintenance of a risk register which includes the material tax risks faced by the Group.
The tax implications of all major transactions (for example M&A transactions, corporate structure changes, and cross-border intra-group transactions) will be reviewed in advance by the Group Tax team with appropriate support from external advisors.
The Group will ensure that all decisions are taken at the appropriate level with appropriate supporting documentation. As part of the decision-making process, due consideration will be given to the Group’s reputation and corporate and social responsibilities.
The Group accepts that certainty of tax treatment cannot be achieved in all circumstances (in the context of both compliance and transactions). The precise amount of tax risk the Group is willing to bear will depend on the facts and circumstances relevant to the issue under consideration. The level of tax risk, which the Group is exposed to overall, is considered as part of the review of the risk register and the level of provisions for tax exposures in the Group’s financial statements.
The Group has undertaken a risk assessment to identify areas of its business that may be susceptible to tax evasion, or facilitation thereof by associated persons. The Group’s due diligence procedures are monitored to ensure they remain fit for purpose, which includes identifying and preventing facilitation of tax evasion by associated persons.
Additionally, the Group maintains measures to ensure that staff are suitably aware of the risks of associated persons engaging in tax evasion and how to prevent it from occurring. This includes, but is not limited to, annual mandatory staff training.
The Group’s financial reports, stakeholder presentations and other publicly-available documentation will provide stakeholders with a clear understanding of the Group’s tax position, including its Tax Strategy and governance processes as well as the financial position (effective tax rate, taxes paid and tax assets/liabilities).
To advance the debate on the responsible management of tax by UK business, the CBI offers this statement of tax principles for its members.
This statement of principles is intended to promote and affirm responsible business tax management by UK businesses. These principles are based on five key observations:
Relationships between UK businesses and HMRC should be transparent, constructive, and based on mutual trust with the result that HMRC should treat business fairly and with respect, and with an appropriate focus on areas of risk. UK businesses should, therefore:
