The IVC Evidensia 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 tax authorities in each country, including, in the UK, 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.
The IVC Evidensia 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 17,000 employees and over 1,300 clinics. With operations in countries including the UK, Sweden, Norway, Denmark, Finland, Germany, Switzerland, the Netherlands, Belgium and France, we are also now the largest veterinary care provider 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 and the tax authorities in each country, 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 to submit the correct information to HMRC and to the tax authorities in each country, at the right time.
Finance Act 2016
This Tax Strategy was approved by the Board and is applicable to all our tax activities in the UK and in mainland Europe. This Tax Strategy meets the requirement for the IVC Evidensia Group to publish its Tax Strategy in relation to UK taxation, as required by section 161 and paragraph 19(2) of Schedule 19 of the Finance Act 2016. It is effective for the year ended 30 September 2019 and covers all companies in the IVC Evidensia Group in the UK and in mainland Europe.
Tax risk management and governance
The IVC Evidensia Group Board of Directors is ultimately accountable in respect of all UK and mainland Europe 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 Evidensia Group.
The day-to-day management of tax planning and compliance sits with the Group CFO (supported by the Group Finance and 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 companies. 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 and mainland Europe taxation, the IVC Evidensia 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 is centralized in the UK and payroll processing takes place in a single location in each country, ensuring that appropriate expertise is concentrated and can oversee all relevant transactions
- All employment related payments are required to be made through the payroll.
In this way, tax risk can be identified on a real-time basis, focusing on areas of the business and transactions where there exists inherent tax complexity or uncertainty. Internal focus is directed to these higher risk areas, with external advisors also engaged by the Group to provide tax advice and compliance support where additional resource or expertise is required to mitigate these tax risks.
Tax compliance and reporting
We 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 and mainland Europe.
This means that we ensure we have adequate UK and mainland Europe 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 risk
All decisions affecting UK and mainland Europe taxation align to commercial activity and tax is one of the many factors that are 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 relevant country’s tax authority’s (including HMRC in the UK) and government’s 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 and from other countries’ tax authorities 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 Evidensia 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, including the provision of training on transfer pricing matters to key finance personnel within the IVC Evidensia Group.
How we work with HRMC and other countries’ tax authorities
We seek to maintain an open and transparent relationship with HMRC and with each country’s tax authorities in how we manage tax risk across all relevant taxes and duties. We are committed to respond to any requests from HMRC and from each country’s tax authorities relating to current, future or past tax risks in as collaborative, clear, complete and precise a 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 and other countries’ tax authorities’ investigations.