This document outlines the principles of the group’s tax strategy, which aims to define a framework for the group’s approach to tax and provides guidance to the principles adopted and approved by the audit committee and board. It applies to financial years ending February 2020 and onwards and is intended to comply with the requirements of paragraph 16(2) of Schedule 19 of the Finance Act 2016.
The board of directors of boohoo group plc plc has ultimate oversight of the tax strategy and the audit committee performs regular reviews with the finance function responsible for implementation and operation of tax strategy and policies.
The group’s tax strategy is to comply with tax laws in each country of operation, whilst seeking to deliver value to our shareholders. We seek to arrange our affairs in a tax-efficient manner based on the commercial drivers of the business - we do not enter into artificial arrangements. boohoo group plc plc is conscious of its corporate responsibility with regard to fair and transparent tax planning that results in an equitable amount of tax being paid in the countries in which it operates. At present, the group’s principal operations are situated in the UK, where by far the greatest proportion of its group profits are taxed.
Approach to tax risk management and governance
The board and the audit committee together are responsible to ensure the group has appropriate tax advisory and compliance functions. The execution of the strategy and policies are the responsibility of the Chief Financial Officer, who ensures that the tax aspects of business arrangements are evaluated and carefully considered and that there are appropriate policies, procedures and systems to ensure the accuracy of tax declarations and timeliness of payments. The Chief Financial Officer is assisted by a professional in-house team with appropriate expertise and experience in complex tax affairs, which in turn is supported by external professional advisers.
The board and audit committee are also responsible for approving the tax strategy of the group and ensuring compliance with that strategy. boohoo group plc plc has a low risk tax strategy, which seeks to optimise shareholder value by reducing taxes by legitimate reliefs and allowances but avoiding artificial tax structures, such as those involving overseas tax havens.
Tax planning and risk
The group maintains a tax risk register, which is reviewed by the board annually, and outlines the principal tax risks faced by the group. The register details the responsibilities of management to control and mitigate the risks within the framework of an effective compliance function.
The group produces annually a detailed tax overview document, which summarises the group operations and tax risks associated with the group’s activities, with particular emphasis on its overseas operations and transfer pricing. This document forms the basis for the board and audit committee to evaluate and define the overall strategy.
External tax advisers are consulted on a regular basis to ensure the group receives the highest level of tax expertise, especially with regards to overseas tax jurisdictions. External tax advisers also prepare the group’s corporation tax computations and external assurance is provided on the group’s indirect taxes compliance.
Dealings with HM Revenue and Customs
The group currently corresponds with HMRC principally through its tax advisers and occasionally directly with regard to routine enquiries and tax inspections. Given the group has recently entered the Senior Accounting Officer regime, we would welcome the anticipated more regular and structured open dialogue that this delivers to provide certainty over our tax affairs to both boohoo and HMRC. At all times, the group seeks to communicate openly and fairly with tax authorities and to maintain good relationships.
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