This policy details the Enva Group of companies’ (“the Group”) approach to conducting its UK tax affairs and identifying and mitigating taxation risk. The document also outlines the Group’s strategy for tax planning, attitude to tax risk and its relationship with external tax advisers and HMRC. The tax operating principles and guidelines governing the management of our tax affairs are aligned with the Group’s wider commercial, reputational and business practices and are consistent with our commitment to corporate responsibility.
The Group is committed fully to discharging its responsibilities in respect of all relevant tax legislation in a clear and transparent manner, based on collaborative relationships with all tax agencies in the jurisdictions within which we operate (UK and ROI). The Group will continue to seek to optimise its post-tax returns. It will not however engage in practices or adopt instruments that are contradictory to the intent of the legislation. It is in this context that this document addresses the requirements of HMRC for large businesses to publish a tax strategy.
SPECIFIC HMRC REQUIREMENTS FOR A PUBLISHED TAX STRATEGY
The Finance Act 2016 requires the published tax strategy of a business to cover four specific requirements:
Enva considers that the above items are all satisfactorily addressed in this document and therefore it is compliant with the requirements of the Finance Act 2016, Schedule 19, Para 16 (duty to publish a tax strategy) in the current financial year ended 31 March 2021.
1. THE APPROACH TO RISK MANAGEMENT AND GOVERNANCE ARRANGEMENTS IN RELATION TO UK TAXATION
The Head of Finance is responsible for ensuring that appropriate tax policies, processes and systems are in place and that these are reviewed for operational effectiveness.
The Group Finance Department is adequately staffed, has clearly defined roles and has the required skills and support to carry out its role effectively. Regular training is provided to ensure staff are capable of identifying and managing the tax risks faced as a result of the ever-changing tax obligations both in the UK and overseas.
Appropriate proactive and real-time support is provided to all areas of our business operations such that commercial objectives can be maximised, risks can be minimised, and appropriate tax incentives can be claimed. Commercial objectives will however on no occasion override compliance with tax laws and regulations.
Enva adheres to the Senior Accounting Officer (“SAO”) guidelines as set out by HMRC. The SAO’s main duty is to take reasonable steps to ensure establishment and maintenance of appropriate tax accounting arrangements. The SAO must also take reasonable steps to monitor these arrangements and to identify (and rectify) any respects in which arrangements are not appropriate. This captures the entire end-to-end process and all people involved from initial data input through to data extraction and completion of tax returns. Annual meetings with the relevant stakeholders are held to review the tax accounting processes and consider any failings and how these have been dealt with in the year.
The Board will periodically review tax matters affecting the UK group, via updates provided by the Head of Finance and COO, as appropriate.
2. THE ATTITUDE OF THE GROUP TOWARDS TAX PLANNING (SO FAR AS AFFECTING UK TAXATION)
Ensuring that we pay the right amount of tax at the right time is core to Enva, and we make a significant total tax contribution to the UK Exchequer each year, as well as the Republic of Ireland.
However, we will manage our tax costs through maximising the tax efficiency of our business transactions. Specifically, we recognise that there is sometimes more than one tax outcome in commercially motivated transactions. We will not however wilfully engage in tax schemes, abuse tax havens or structure transactions in such a way that we believe is artificial and/or contrary to the clear intentions of the tax legislation concerned.
We will only use tax planning to support business strategy and as such, all decisions will have a sound commercial rationale will be within the confines of the law and will take into account any impact that such actions will have on our external reputation.
We seek advice from external advisors when required. This will normally be the case when the Head of Finance considers there is not the requisite experience within the Group Finance team adequately to address the issue, where tax law is unclear/open to interpretation or that the issue is sufficiently large to warrant corroboration by an independent third party. The Head of Finance will be responsible for any such appointments and shall have in mind, any restrictions imposed for such services under UK law on the use of the UK external auditor.
3. THE LEVEL OF RISK IN RELATION TO UK TAXATION THAT THE GROUP IS PREPARED TO ACCEPT
The acceptable nature of tax risk we are prepared to take is inextricably linked to the level of business risk we are prepared to take, which is aligned to Enva’s commercial, reputational and business practices. In this regard, various factors will always be considered including, but not limited to, the financial impact, the impact on corporate reputation/brand and the impact on relationships with external stakeholders.
4. THE APPROACH OF THE GROUP TOWARDS ITS DEALINGS WITH HMRC
We engage with HMRC (and the relevant authorities in the Republic of Ireland) with honesty, integrity, respect and fairness and in a spirit of co-operative compliance. We believe we have a transparent and open relationship with HMRC and will cooperate with them, to the extent possible, on a real-time basis. Where appropriate, Enva will also enter into consultations with HMRC to assist in the shaping of future legislation and tax policy. All information requests from HMRC, whether under a formal enquiry or otherwise, are processed in as timely a manner as possible in order to ensure that the information provided is accurate and complete.
We will, to the extent possible, discuss material tax issues with HMRC in advance where we consider that the tax treatment proposed by Enva not be agreed by HMRC.
To ensure consistency of approach, all dealings with HMRC are where possible dealt with by the Group Finance team. On occasions, contact with HMRC is required to be made by others, but this is always with the full knowledge of the Head of Finance. The above approach is also extended to other Government Agencies and, occasionally, overseas fiscal authorities.
In all the above, however, Enva does expect an equal degree of professionalism and mutual respect from HMRC in its dealings with them.