This document, approved by the Board of Hovis, sets out the Group’s approach to conducting its tax affairs and dealing with tax risks for the year ending 31 December 2020.
Group Tax Strategy in Summary
Hovis is committed to conducting its tax affairs to comply with all relevant laws, rules and regulations and reporting and disclosure requirements.
The Group has an open and collaborative dialogue with HM Revenue & Customs and it should be noted that the Group has low risk status.
This strategy applies to the sub-group of companies headed by Hovis Holdings Limited in accordance with paragraph 19 of Schedule 19 to the Finance Act 2016. A list of the entities to which it applies is set out below. In this strategy, references to ‘Hovis’, ‘Group’ or ‘sub-group’ are intended to apply to all these entities. The strategy is being published in accordance with paragraph 19(2) of the Schedule.
References to ‘UK Taxation’ are to the taxes and duties set out in paragraph 15(1) of the Schedule which include Income Tax, Corporation Tax, PAYE, NIC, VAT, Insurance Premium Tax, and Stamp Duty Land Tax. References to ‘tax’, ‘taxes’ or ‘taxation’ are to UK taxation and to all corresponding worldwide taxes and similar duties in respect of which the UK Group has legal responsibilities.
Hovis recognises that filing tax returns with the authorities and payment of associated liabilities is one of its key responsibilities. Ultimate responsibility for the Group’s tax strategy and compliance rests with the Board. The Board refers collectively to the Board of Directors of each of the entities listed below.
Oversight of the Groups’ taxation obligations is assigned to the Finance Director, whose responsibility is to appraise the Board of Directors of key tax events and is supported by an appropriately qualified and experienced Financial Control team. Appropriate training is provided for staff involved in matters which have tax implications.
The Group operates a system of tax risk assessment and controls as a component of the overall internal control framework applicable to the Group’s financial reporting system.
The Group seeks to maintain a low level of tax risk arising from its operations as far as is reasonably practicable by ensuring that reasonable care is applied in relation to all processes which could materially affect its compliance with its tax obligations.
Where there is significant uncertainty or complexity in relation to a risk, external advice is sought when appropriate.
Attitude towards tax planning and level of risk
In structuring our commercial activities, the Group will consider the tax laws of the countries in which it operates. Any structuring that is undertaken will have commercial and economic substance and utilise available tax incentives, reliefs and exemptions in line with, and in the spirit of, tax legislation. The Group will not put in place any arrangements that are contrived or artificial.
The Group manages risks to ensure compliance with legal requirements in a manner which ensures paying the right amount of tax in the right place at the right time.
The level of risk which the Group accepts in relation to UK taxation is consistent with its overall objective of achieving certainty in its’ tax affairs. At all times, the Group seeks to comply fully with its regulatory and other obligations and to act in a way which upholds its reputation as a responsible corporate citizen. In relation to any specific issue or transaction, the Board is ultimately responsible for identifying the risks, including tax risks, which need to be addressed and for determining what actions should be taken to manage those risks, having regard to the materiality of the amounts and obligations in question.
Relationship with HMRC
The Group seeks to have a transparent and constructive relationship with HMRC through regular meetings and communication in respect of developments in the Group’s business, current, future and retrospective tax risks, and interpretation of the law in relation to all relevant taxes.
The Group ensures that HMRC is kept aware of significant transactions and changes in the business and seeks to discuss any tax issues arising at an early stage. When submitting tax computations and returns to HMRC, the Group discloses all relevant facts and identifies any transactions or issues where it considers that there is potential for the tax treatment to be uncertain.
Any inadvertent errors in submissions made to HMRC are fully disclosed as soon as reasonably practicable after they are identified.