UK Tax Strategy Report December 2017
This document has been approved by the board of Kepak and sets out the approach of Kepak group (‘the Group/Kepak’) to tax risk management and tax planning. It will be reviewed periodically by the Group Tax Team and amended as appropriate, where these amendments are approved by the board.
This document is regarded by the Group as meeting the requirements, set out in Paragraphs 19(2) and 22(2) of Schedule 19(2), Finance Act 2016, for ‘UK sub-groups’ and ‘qualifying companies’ (as defined in the legislation) to publish a tax strategy report. Listed at Appendix I are all of the UK entities to which this tax strategy report relates.
2. Tax risk management
Kepak’s production facilities are based in the Republic of Ireland and the UK; however, the Group trades with customers located across the globe. As the Group’s activities require both a globalised approach to tax strategy, as well as dedicated local tax resources, the Group’s tax affairs are managed by a centralised Group Tax team. This team is led by the Group Finance Director, who reports directly to the board of the Group on tax matters.
In broad terms, three types of tax risk can arise for the Group; transactional, structural and/or compliance tax risks. In order to assess and manage tax risks, the tax affairs of the Group are handled in the following manner:
- All staff involved in Group tax affairs apply professional diligence and judgement in the management of tax risk across the Group.
- A Group Tax Responsibility Protocol clearly defines responsibility and accountability of all Group tax staff for the Group’s tax affairs.
- All local tax staff responsible for tax compliance in relation to income taxes and fiduciary taxes retain appropriate qualifications and experience, and are subject to effective monitoring.
- The Group Tax Responsibility Protocol sets out the tax issues that must be brought to the attention of the Group Tax team.
- The Group Tax team retain appropriate qualifications and experience.
- The Group Tax team assess any tax risks that may arise in relation to the structure of the Group and the business activities of each Group member, as well as Group capital, financing and business transactions. The team also supports the compliance activities of local tax staff.
- The Group Tax team are responsible for all group reporting requirements.
- Where additional tax expertise is required, the centralised Group Tax team liaise with external Tax advisers and are advised by them.
3. Tax planning: our approach
Kepak is committed to meeting the requirements of all tax laws, regulations, and reporting and disclosure requirements, applicable to its business worldwide.
The commercial needs of the Group are paramount and all tax planning will be carried out within this context. This means that all transactional and structuring decisions must have a business purpose and commercial rationale. In addition to this principle of commerciality, any tax action or decision will have due regard to the following:
- The legal and fiduciary duties of directors and employees of the Group
- The impact on the Group’s corporate reputation
- The potential tax benefits compared to the potential financial costs, including interest and penalties, where there is disagreement with a tax authority, and
- The potential impact of any disagreement with a tax authority, in the context of the ongoing relationship with them.
4. Tax risks
The Group aims for certainty on the tax positions adopted, however, there will be situations where tax law is unclear and/or its interpretation by the relevant tax authority is not certain. The Group will use its best judgement to determine the appropriate course of action.
Where deemed appropriate, the Group will secure additional advice on an uncertain matter from external tax advisers and, if recommended by them, will contact the relevant tax authority to discuss the matter.
The Group will use tax incentives and reliefs to minimise the tax costs of conducting its business activities, but will not use them for purposes that are known to be contrary to the intent of the legislation.
5. Relationship with tax authorities
All dealings with tax authorities wherever the Group operates around the world will be conducted in a collaborative, courteous and timely manner. The Group aims to achieve certainty, where possible, and early resolution of uncertain or disputed matters.
Relationship with HMRC
The Group’s tax strategy is in alignment with the Framework for Cooperative Compliance published by HMRC. In particular, the Group is committed to:
- Engaging in open and early dialogue with HMRC to discuss tax planning, strategy, risks and significant transactions.
- Seeking to resolve uncertain/disputed issues before returns are filed (where possible).
- Making fair and accurate disclosures in tax returns and correspondence submitted to HMRC.
- Responding to queries, information and clearance requests in an open and timely fashion.
- Structuring transactions in a manner that the Group reasonably believes aligns with its commercial aims and activities, and reasonably believes are not contrary to the known intent of the UK Parliament.
UK entities to which this Tax Strategy report relates
Kepak UK Ltd
Kepak Proten Ltd
British Beef Ltd
Kepak Kirkham Ltd
Rustlers Foods Ltd
Big Al’s Food Company Ltd
Kepak Convenience Foods Unlimited Company – UK permanent establishment
Barberstown Foods Unlimited Company – UK permanent establishment