The IVC Evidensia Group (the “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 HM Revenue & Customs (“HMRC”) in the UK, 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 Group is a fast-expanding provider of veterinary services and has its Support Office in Keynsham, England. The Group is the UK’s market leader in veterinary care with over 17,000 employees and over 1,500 clinics. The Group is also the largest veterinary care provider in Europe with operations in the UK and Ireland, Sweden, Norway, Denmark, Finland, Germany, Switzerland, the Netherlands, Belgium, France, Spain, Poland, Czech Republic, Portugal, Canada and USA.
The Group takes 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 staff to make the right decisions and to act in a fair, trustworthy and impartial manner at all times, towards both internal colleagues and external partners.
The Group’s Tax Strategy is aligned to these Principles and Values, ensuring the management of tax obligations is carried out with a focus on openness, transparency and engagement with stakeholders, including HMRC and the tax authorities in each country. In complying with legislation, our objective is to pay the right amount of tax and to submit the correct information to tax authorities in good time.
Finance Act 2016
The Group’s Tax Strategy is approved by the Group’s Board of Directors (the “Board”) annually and is applicable to all our tax activities in the UK, Ireland, mainland Europe and North America. This Tax Strategy meets the requirement for the 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 2020 and covers all companies in the IVC Evidensia Group in the UK, Ireland, mainland Europe and North America.
The Head of Tax is responsible for the setting of the Tax Strategy and for its implementation. The strategy will be periodically reviewed by the Head of Tax and any recommended amendments to the Tax Strategy will be presented to the Board. The Board is ultimately accountable in respect of all UK, Ireland, mainland Europe and North American 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 Group.
The day-to-day management of tax planning sits with the Head of Tax, with support from the Group’s finance teams and oversight from the Group CFO. The day-to-day management of tax compliance sits with within the Group’s finance function with oversight from the Group CFO. The Head of Tax, along with the wider finance team, has a broad range of experience both within IVC and in other large companies. The finance team includes a range of staff with professional qualifications appropriate to the roles that they perform.
The Head of Tax escalates any tax risk matters, as appropriate, to the Executive Team, who meet frequently and advise and inform the Board of any significant issues. Board meetings are held on a six-weekly basis. Compliance and risk matters, including those concerning taxation are included on the agenda at these Board meetings, as required.
In managing risk as it affects UK, Ireland, mainland Europe and North American taxation, the 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:
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 engaged by the Group to provide tax advice and compliance support where additional resource or expertise is required to mitigate tax risks.
The Group is committed to observing applicable laws, rules and regulations in meeting tax compliance and reporting responsibilities in the UK, Ireland, mainland Europe and North America, being the territories in which the Group operates.
This means that the Group ensures adequate UK, Ireland, mainland Europe and North American tax resource and expertise, including the use of external advisors, is available to meet all 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 reconciliation checks to underlying systems to provide additional control over accuracy of tax numbers.
The Group seeks to apply diligent professional care and judgement in tax compliance activities, and where applicable provide sufficient evidence to support judgements made.
Decisions affecting UK, Ireland, mainland Europe and North American taxation align to commercial activity and taxation is one of the many factors that are considered when making business decisions. The Group seeks to align taxable profits with substance and economic value creation.
To achieve the Group’s aim of aligning taxable profits with substance and economic value creation, intercompany transactions follow the transfer pricing arm’s length principles. These principles are based on respective local legislative requirements as well as the overarching guidelines set out by the Organisation for Economic Co-operation and Development (“OECD”), being the generally accepted international standards for transfer pricing.
At the same time, and like any other business, the Group seeks to create value for investors. As such, operations may take advantage of tax incentives and exemptions, but in a way that is consistent with the relevant country’s tax legislation and government policy and guidance. As such, the Group seeks to ensure that tax arrangements are not simply compliant with legal legislation but also fall within the spirit and intention of the relevant tax laws.
In cases where the tax guidance is unclear or the Group considers it does not have the necessary expert knowledge to assess the tax consequences adequately, external advice may be sought from tax advisers or tax authorities to support the Group's decision-making process.
The Group seeks to maintain an open and transparent relationship with HMRC and with each country’s tax authorities in managing tax risk across all relevant taxes and duties. The Group is 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.
The Group will also disclose and seek to resolve any known issues prior to the filing of tax returns, while maintaining proactive cooperation with tax authorities’ investigations.