Our tax strategy is to plan and operate transparently. We want our tax position to be fair – and to be seen as being fair – for our shareholders and society in all the countries where we operate.
Below, we set out how we implement this strategy. It covers four areas:
- Our approach to managing tax risks
- Our attitude to tax planning
- Tax compliance and levels of acceptable risk
- Our approach to dealing with tax authorities
1. Our approach to managing tax risks
As part of its overall risk management policy, the PA Board has put in place various structures and processes to deliver effective management of our tax risks:
- The Audit Committee is responsible for overseeing our tax risks. It reports regularly to the Board. The Audit Committee approves our tax strategy and receives regular updates on tax matters.
- The Investment Committee has operational oversight of our tax affairs. The Investment Committee is responsible for approving the tax impact of all material transactions.
- The CFO, as Senior Accounting Officer, is responsible for ensuring we maintain appropriate tax accounting arrangements. This involves establishing financial controls and systems to ensure we file accurate tax returns and meets our legal obligations to tax authorities.
2. Our attitude to tax planning
We continue to seek non-controversial ways to improve our tax position and influence the key drivers of our tax rate.
- Our approach is to engage in efficient planning that supports our business and reflects its commercial and economic activities.
- In common with other businesses, we use external tax advisers to assist with more complex issues and help validate in-house proposals.
- As a supplier to the UK and other national public sectors, we fully support the principles contained in the UK Government's Procurement Policy Note "Measures to promote tax compliance", issued by the UK Cabinet Office. We don’t engage in abusive tax arrangements or artificial tax avoidance schemes.
3. Tax compliance and levels of acceptable risk
We aim to be a responsible taxpayer in all the countries where we operate.
- We manage our tax position centrally from the UK. This team ensures we operate consistent and responsible tax processes in all our countries.
- We apply the same approach to all jurisdictions, including those countries where a tax authority has less capacity to scrutinise issues.
- We also encourage responsible tax behaviour in our supply chain, by requiring our suppliers to meet certain standards.
However, tax law can be complex and occasionally there are differences of interpretation or areas of uncertainty. If challenged, we’ll defend our tax positions and engage professional advisers to assist, when appropriate.
4. Our approach to dealing with tax authorities
We aim to build good relationships with tax authorities in all the countries where we do business.
- We work transparently with local tax authorities to meet their statutory requirements.
- We adopt positive and proactive disclosure, and co-operative working practices.
- We seek to be treated as a taxpayer like any other, and we don’t try to obtain preferential treatment in tax rulings or settlements.
Our main tax relationship is with the tax authority in the UK, HMRC, because most of our subsidiaries and employees are based in the UK. We therefore hold regular meetings with HMRC to share information on our activities and to discuss the tax treatment of our transactions. In other jurisdictions, although there may be less regular contact with tax authorities, we still respond positively and transparently to their requests for information.