In accordance with the requirements of Schedule 19 Finance Act 2016, we have published the below tax strategy in respect of Floramedia UK Limited (“the Company”) for the accounting period to 31 December 2017.
This document is publically available on the Company’s website and was originally published on 2nd January 2018.
This document provides commentary in respect of:
- the Company’s approach to risk management and governance arrangements in relation to UK taxation;
- the attitude of the Company towards tax planning (so far as affecting UK taxation);
- the level of risk in relation to UK taxation that the Company is prepared to accept; and
- the approach of the Company towards its dealings with HMRC.
The Company will only enter into transactions which would be fully justifiable should they become a matter of public record. If there is any question as to the tax treatment of a transaction the Company will obtain relevant professional advice and/or confirmation from the relevant tax authorities before proceeding.
The Company is committed to ensuring that it fulfils its social and moral obligations by operating both within the letter and spirit of relevant tax legislation to ensure a fair amount of taxation is paid in the UK.
1) Approach to tax risk management
Management of tax risk
The Company has a policy of manging tax risk to ensure that the Company does not expose itself to significant uncertainties in respect of tax policy. The main objectives are:
- Raising awareness of the nature of tax risks to relevant staff
- Ensuring compliance with tax laws and regulations,
- Ensuring timely identification of tax risks and tax planning opportunities,
- Monitoring developments and changes in tax law, and
- Monitoring developments in the area of digitalisation.
Ultimate responsibility for managing tax risk lies with the board of directors of the Company. The Company’s tax affairs are overseen by its parent Company, Floramedia Nederland BV. Ultimately the Company is a subsidiary of HAL Holdings N.V., the overriding groupwide approach to tax risk and tax strategy of which the Company is required to comply is set and monitored by HAL Holdings N.V. In addition, where the Company is considering entering into material non recurring transactions the Tax Director of HAL Holdings N.V. will oversee the transaction.
Systems and controls
The overriding tax principles of the Company are to ensure:
- That the Company complies with all laws and regulations in relation to tax that apply to the Company by ensuring that all returns reflect the economic, legal and accounting reality of a given situation, that returns meet all disclosure requirements and are filed on a timely basis.
- That the Company robustly plans its tax arrangements to ensure compliance with tax law and avoid unnecessary disputes with tax authorities
- That the Company develops well established relationships with the tax authorities based on mutual understanding and transparency.
- That where alternative routes exist to achieve the same commercial results the tax efficiency and viability of each route is considered to ensure that operations are conducted in an efficient manner.
If there is significant uncertainty as to the tax risk of any transaction then relevant professional advice will be sought by the Company, the matters will be raised with the group tax department and (if applicable) the matter will be discussed with HM Revenue & Customs.
Governance and board oversight
The Company’s governance arrangements ensure that a structured and comprehensive review process is in place to manage tax risk. All matters which are deemed to have a significant UK tax risk are reviewed by the directors of the Company and CFO of Floramedia Nederland BV who will conclude whether it is appropriate for the decision to be ratified by the Board of Directors.
2) Attitude towards tax planning
The Group defines tax planning as: “searching for an optimal, sustainable tax position based on economic reality whilst satisfying applicable laws, relevant regulations and jurisprudence whilst also meetings the Group’s ethical principles”
Code of conduct
Included within the Company’s code of conduct, which all employees are required to comply with, is a requirement that in respect of taxation matters, employees must:
- Act responsibly
- Abide by all policies, rules and procedures
Use of External Advice
Where appropriate, professional tax advice is obtained by the Company from reputable, high quality tax advisory firms. Opinions, an on occasion second opinions and explanatory letters are obtained from such advisors to give sufficient comfort to properly assess the risks involved in particular planning. The Company’s policy is to maintain independence from external advisors such that the Company can make an impartial decision on whether or not to implement any specific planning.
Tax planning motives
The commercial requirements of the Company are of utmost importance to any planning, whether tax or otherwise undertaking by the Company. Any and all tax planning undertaken by the Company during the accounting period has been undertaken primarily with a view to furthering the commercial success of the business.
The Company’s tax planning strategy is always to act within the letter of the law, and where possible the Company will seek to maximise efficiency through available reliefs, such capital allowances on capital expenditure.
Predominantly artificial arrangements and structures, lacking economic reality, explicitly do not fit within the Company’s commercial or tax strategy.
3) Risk Review
The Company considers that it is prepared to accept a low level of risk in respect of UK taxation matters.
The tax policies of the group in the UK are monitored by the Board of Directors and CFO of Floramedia Nederland B.V. with oversight from the tax department of HAL Holdings B.V. to ensure that tax risk is reduced to an acceptable level. Professional advice is sought where it is considered that there is an unacceptable level of risk.
Due consideration is given to the Company’s reputation, brand and corporate identity along with its social responsibilities when considering taxation. It is the Company’s policy to avoid entering into any tax planning which could result in negative publicity or damage the corporate reputation of the Company.
4) Approach to dealings with HMRC
How we work with HMRC
One of the Company’s main tax principles is to develop well established relationships with HMRC based on mutual understanding and transparency. The Company seeks to achieve this by entering into honest and open correspondence with HMRC on tax matters and by co-operating with HMRC at all times.
The directors consider that the Company has a productive and sustainable relationship with HMRC.
Dealing with risk
The Company’s attitude to tax risk is set out above, and where the company enters into transactions where there is potentially a high level of tax risk it is the Company’s policy to ensure that this risk is reduced to an acceptable level before proceeding.
Should it become apparent that a previous transaction has resulted in a high level of tax risk or potential tax uncertainty then it is the Company’s policy to seek professional advice.
Dealing with tax events
The Company considers a transaction to constitute a tax event if, as a result of the transaction, there is a potentially material impact on the company’s tax liabilities, and where such an event occurs it is the company’s policy to obtain professional advice.
Interpreting the law
United Kingdom tax can be complex and therefore it is possible that differences of opinion and uncertainty over the interpretation of tax law may arise in certain scenarios. It is theCompany’s policy to refer to both professional guidance and guidance from HMRC wherethere is uncertainty over interpretation to ensure that it has robustly considered the risk ofmisinterpretation of the law before entering into a transaction.