Group Tax Strategy – October 2023
Objectives
The overall objectives of the group are as follows:
- To comply with UK tax legislation in all aspects of our business operations and deal with HMRC in an open fashion with due regard for the group’s reputation.
- To only undertake tax planning which supports genuine commercial activity.
- To maintain accounting systems and controls sufficient to support tax compliance obligations.
- To make timely and accurate tax returns that reflect our tax obligations and to ensure we meet these obligations as they fall due.
- To provide robust and transparent tax disclosures for financial reporting.
- As a business, to generate profits in a tax efficient way.
- To ensure that intercompany transactions are undertaken on an arm’s length basis and during the ordinary course of business in line with UK tax legislation and the OECD’s transfer pricing guidelines.
Governance
Compliance with tax laws is embedded within the group’s governance structure through consideration of tax issues at all stages in the business cycle. Specifically:
- The group tax strategy is part of the Board approved framework of policies, approved annually by the Audit and Remuneration Committee.
- Responsibility for the group tax strategy and management of tax risk of the UK group companies ultimately sits with the UK Chief Operating Officer, with day-to-day responsibility assumed by the UK Head of Finance.
- All new products require consideration of tax implications and appropriate systems to be in place to properly account for tax. New products are approved at EMC and are governed under our Project Management Framework. A requirement of the framework will be identifying and addressing all risks, including those related to tax, associated with the new product and or change (i.e. maintaining a risk register).
- To assist with tax planning issues and interpretation of UK tax law and/or in areas where there are changes to UK tax legislation which affect the group, appropriate professional advice, as necessary, is sought to assess the impact on products, services or transactions.
- Tax planning is driven by commercial transactions and is managed as a cost to the business
- Tax is an integral part of the Finance function and compliance with all UK tax filing and payment deadlines is overseen by the Head of Finance.
- The group maintains a retention policy for documents as per HMRC requirements.
Communication plan with HMRC
The group aims at all times to:
- Communicate with HMRC in an open and constructive way. Adopt a collaborative approach to resolve issues and, where appropriate, in advance of filing or payment requirements.
Make full disclosure of all items required in filing UK tax returns.
Risk Management
The group has a low appetite for tax compliance risk and does not participate in aggressive planning or complex structured arrangements designed to minimise its tax liabilities.
The group’s approach includes:
- Knowing how tax fits into the group’s overall business strategy, and ensuring that the right people are responsible for basic business processes as they affect tax.
- Establishment of a regular monitoring process.
- Utilisation of external subject matter experts to provide advice and support on tax compliance
In making this strategy available the group regards its publication as complying with the duty under paragraph 16(2) Finance Act 2016 in the current financial year.