PurposeThe IVC Group Tax Strategy sets out the Group’s approach to tax. In particular, it summarises how the Group manages risk in relation to tax, its dealings with HM Revenue & Customs (‘HMRC’), and its governing principles relating to tax planning and relationships with professional advisers. The strategy sets the overarching principles of the Group towards tax and the responsibilities for implementing these throughout the business.
IntroductionThe IVC Group is a fast-expanding provider of veterinary services and has its Support Office in Keynsham, England. We are the UK’s market leader in veterinary care with over 9,000 employees and over 900 clinics. With operations in countries including UK, Sweden, Norway, Denmark, Finland, Germany, the Netherlands and Switzerland, we are also now the largest veterinary care company in Europe.
As a Group, we take our commitment to corporate and social responsibility very seriously. We have six core principles that support everything we do, and as outlined in ‘Our Principles’ and ‘Our Values’, we strive to maintain the highest standards in all that we do.
These Principles and Values provide the framework for all our staff to make the right decisions and to act in a fair, trustworthy and impartial manner at all times, towards both our internal colleagues and our external partners.
In developing this Tax Strategy, we have aimed to align to these Principles and Values, ensuring a focus on openness, transparency and engagement with stakeholders including HMRC, in our Finance teams in how they manage their tax obligations. In complying with legislation our objective is to pay the right amount of tax and submit the correct information to HMRC at the right time.
Finance Act 2016
This Tax Strategy has been approved by the Board on 13 September 2018 and is applicable to all our tax activities in the UK. This tax strategy meets the requirement for the IVC Group to publish its Tax Strategy in relation to UK taxation as required by section 161 and paragraph 19(2) of Schedule 19 of Finance Act 2016. It is effective for the year ended 30 September 2018 and covers all companies in the IVC Group in the UK.
Tax risk management and governanceThe UK board of directors is ultimately accountable in respect of all UK tax matters, and provides oversight in ensuring that tax is considered within the wider context of the business and in how tax risk is managed across the IVC UK Group.
The day-to-day management of tax planning and compliance sits with Group CFO (supported by the Group Finance and the UK Finance teams). Day-to-day tax compliance matters are delegated to these teams. The Finance team has a broad range of experience both within IVC and in other large organisations. The team includes a range of staff with professional qualifications appropriate to the roles that they perform.
The Finance team escalates any tax risk matters as appropriate to the Board. Board meetings are held on a six weekly basis. Compliance and risk matters, including those concerning taxation as appropriate, are included on the agenda at these Board meetings.
In managing risk as it affects UK taxation, the IVC Group has developed a framework of procedures, controls and training specific to its tax operations to ensure that all financial transactions are accurately reported and the related tax is calculated correctly, including:
- Tax risks are monitored and appropriate mitigating actions put in place
- Only suitably qualified staff within the IVC Finance team take decisions regarding taxation
- Accounting and payroll processing in the UK is centralised, ensuring that appropriate expertise is concentrated in one place and can oversee all transactions
- All employment related payments are required to be made through the payroll
Tax compliance and reportingWe are committed to observing all applicable laws, rules and regulations in meeting our tax compliance and reporting responsibilities everywhere we operate and specifically, for the purposes of this Tax Strategy, in the UK.
This means that we ensure we have adequate UK tax resource and expertise, including the use of external advisors, to meet all our tax compliance obligations, as well as having established internal processes and controls. By way of example, these include segregation of duties, initial and second levels of review and where appropriate, reconciliation checks to underlying systems to provide additional control over accuracy of tax numbers.
We seek to apply diligent professional care and judgement in our tax compliance activities, and where applicable provide sufficient evidence to support all judgements made.
Attitude to tax planning and riskAll decisions affecting UK taxation align to commercial activity, and tax is one of the many factors that considered when making business decisions. We seek not to take an aggressive stance in our interpretation of tax legislation and we align taxable profits with substance and economic value creation.
At the same time, and like any other business, we seek to create value for our investors. As such, we may structure our operations to take advantage of tax incentives and exemptions, but always seek to do so in a way that is consistent with the UK tax authorities (‘HMRC’) and government policy.
Where appropriate, we will seek clarification, and take and follow appropriate professional advice and opinion to ensure that we apply these incentives and exemptions legitimately. In certain circumstances where risk or uncertainty is still present, we may seek advance clearances from HMRC to resolve this.
The OECD Guidelines are generally accepted as effective and appropriate guidance, on transfer pricing matters both in OECD Member states and elsewhere. The IVC Group is committed to adhering to these guidelines and specifically, the OECD’s arm’s length principle in transfer pricing matters. In this regard, we have taken specialist external advice on this, including the provision of training on transfer pricing matters to key finance personnel within the IVC Group.
How we work with HRMCWe seek to maintain an open and transparent relationship with HMRC in how we manage tax risk across all relevant taxes and duties. We are committed to respond to any requests from HMRC relating to current, future or past tax risks in as collaborative, clear, complete and precise manner as possible, including providing information relating to key business developments that may have a potential tax impact.
We will also disclose and seek to resolve any known issues prior to the filing of the tax return while maintaining proactive cooperation with tax authorities in the case of HMRC tax investigations.