This Tax Strategy (“Strategy”) aims to support:
- Our worldwide business operations
- Compliance with the applicable tax legislation in the countries in which we operate
- Our Senior Accounting Officer (“SAO”) in submitting to His Majesty’s Revenue & Customs (“HMRC”) the annual tax compliance certificate required for large businesses under legislation introduced in 2009 in the UK
This Strategy applies to all:
- Taxes (both direct and indirect) in the countries in which we operate
- Directors, employees and third parties (including external advisors and service providers) whose actions affect our tax affairs
We are committed to maintaining a good working relationship with tax authorities (including HMRC) based on compliance, transparency, co-operation and proactive engagement to minimise tax risk. Specific aspects of our approach to tax authorities in relation to tax compliance and tax planning are described further below.
We are committed to compliance with the tax legislation in the countries in which we operate. Compliance for us means paying in full and in a timely manner all taxes that are due. A requirement of our commitment is that full disclosure will be promptly made to the tax authorities if errors arise in relation to our tax liabilities.
We are focussed on undertaking the commercial transactions (for example, acquisitions) which arise from our business model in a tax efficient manner. Specifically, this means that we will not engage in tax-motivated transactions or put in place arrangements that are contrived or artificial.
We are prepared to discuss tax planning with external advisors to the extent that such planning is aligned with this Strategy. However, the main reason we seek external advice is to support our commercial decision-making process where the tax position appears to be unclear or we do not have the expert knowledge required to fully assess the tax consequences.
Making acquisitions as part of our business model means that we may acquire trading companies in countries with low tax rates. Furthermore, when making acquisitions and disposals, we will consider the associated tax consequences including those relating to the appropriate legal and financing structure.
Our business model, comprising locally managed autonomous operating companies, supports our transfer pricing policy of ensuring that transfers of goods and services between Group companies are on an arm’s length basis.
Our tax risks occur in the following areas:
- Transactional – the application of tax laws to specific transactions
- Compliance – our tax accounting arrangements (including recording transactions) and processes for making tax payments, filing tax returns and responding to questions from tax authorities
- Operational – arising from our routine, everyday business operations
- Financial accounting – the process for arriving at the tax balances included in the Group’s Annual Report and Accounts
Although we don’t have rigid levels of acceptable tax risk, we seek to operate on a low tax risk basis and will not engage in transactions that are considered to be high risk.
Our risks are managed centrally.
The ultimate responsibility for our Tax Strategy and compliance rests with the Group CFO who has executive responsibility for tax matters. Day to day management of tax affairs is delegated to the Group financial controller and Group tax manager who ensure that the appropriate framework is in place to oversee the identification and management of tax risk.
The Group CFO and also being the UK Senior Accounting Officer is regularly appraised of all significant tax developments and participate in all material tax-related decisions.
Regular meetings are held with our tax advisors to ensure that we are aware of legislative changes. Advisors will also be consulted in relation to non-routine transactions (for example, tax advice on land and property transactions).
Further to the tax policy, we have a zero-tolerance policy on tax evasion including the activities which facilitate it. Consequently, we are committed to ensuring that our businesses meet the compliance obligations of the UK corporate criminal offence of failure to prevent the facilitation of tax evasion.
Our Chief Financial Officer is ultimately responsible for this Strategy and is the SAO for all our companies. The Strategy is overseen by our board which receives regular updates, either directly or through the Audit Committee, from the Chief Financial Officer.
Day to day delivery of the Strategy rests with the Group Tax team, based in our UK Head Office, which supports our UK and worldwide business operations in their tax matters and works closely with our external advisors and HMRC.
This Strategy was approved by the Board of IRIS on 30th March 2022 to come into immediate effect. Re-approval will be sought from the Board for any changes.
We regard the publication of this document in March 2022 as satisfying our duty to comply with Paragaph 16(2), Schedule 19 of the UK Finance Act 2016 in respect of the year ended.