UK Tax Strategy Report
31 December 2022
This document has been approved by The Kepak Group (“Kepak”) board and sets out the approach of Kepak to tax risk management and tax planning. It will be reviewed periodically by the Kepak Tax Team and where amendments are approved by the board it will be updated as appropriate.
This document is regarded by Kepak 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, Kepak trades with customers located across the globe. As Kepak’s activities require both a globalised approach to tax strategy, as well as dedicated local tax resources, Kepak’s tax affairs are managed by a centralised tax team. This team is led by Kepak’s Finance Director, who reports directly to the board of Kepak on tax matters.
In broad terms, three types of tax risk can arise for Kepak; transactional, structural and/or compliance tax risks. In order to assess and manage tax risks, the tax affairs of Kepak are handled in the following manner:
- All staff involved in Kepak tax affairs apply professional diligence and judgement in the management of tax risk.
- A Kepak Tax Responsibility Protocol clearly defines the responsibility and accountability of all tax staff for Kepak’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.
- Kepak’s Tax Responsibility Protocol sets out the tax issues that must be brought to the attention of Kepak’s Tax team.
- Kepak’s Tax team retain appropriate qualifications and experience.
- Kepak’s Tax team assess any tax risks that may arise in relation to the structure of Kepak and the business activities of each group member, as well as Kepak capital, financing and business transactions. The team also supports the compliance activities of local tax staff.
- Kepak’s Tax team are responsible for all group reporting requirements.
- Where additional tax expertise is required, the centralised Kepak 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 Kepak 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 Kepak,
- the impact on Kepak’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
Kepak 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. Kepak will use its best judgement to determine the appropriate course of action.
Where deemed appropriate, Kepak 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.
Kepak 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 Kepak operates around the world will be conducted in a collaborative, courteous and timely manner. Kepak aims to achieve certainty, where possible, and early resolution of uncertain or disputed matters.
Relationship with HMRC
Kepak’s tax strategy is in alignment with the Framework for Cooperative Compliance published by HMRC. In particular, Kepak 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 Kepak 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 Group Ltd
Kepak UK Ltd
Kepak Proten Ltd
British Beef Company Ltd
Kepak Kirkham Ltd
Rustlers Foods Ltd
Big Al’s Food Company Ltd
Kepak Huddersfield Ltd
Kepak Convenience Foods Unlimited Company – UK permanent establishment
Barberstown Foods Unlimited Company – UK permanent establishment