UK Tax Strategy
This document is produced in accordance with the requirement under Paragraph 19(2) of Schedule 19 of the Finance Act 2016 for Project Shortway Limited and its UK subsidiary undertakings including Sepura Limited (collectively “the Group”) to publish the Group’s UK tax strategy for the year ended 31 December 2020. This policy has remained effective since that date. It applies to all of the UK taxes relevant to the Group, which are primarily corporation tax, employment taxes, and VAT.
The Board of Directors of Project Shortway Limited (“the Board”) are responsible for overseeing the Group’s overall risk management strategy, including tax. Responsibility for preparing and submitting the Group’s UK tax returns, including assessing tax risks, is delegated to the Group’s finance function, who are accountable to the Board for the procedures they operate. The Group’s finance function maintains sufficient skills and processes to identify and assess tax risks, and seeks advice from the Group’s external professional advisers where appropriate. The Group has codes of practice which underpin its business activities and require its employees to follow the codes of the relevant regulators in each of the territories in which it operates. The Board are committed to conducting the Group’s tax affairs to the highest standards and to comply with all applicable anti-bribery, money laundering and anti-tax evasion legislation.
The Group’s customers in the UK and across the globe are primarily public safety agencies, including police and tax authorities. The Group’s reputation with such customers is of paramount importance and therefore the Group has a low appetite towards tax risk. The Group therefore proactively manages its tax risk by ensuring that risks are identified and understood at an early stage and that effective compliance and reporting processes are in place. The Group does not promote tax avoidance or aggressive tax planning arrangements, locate its business activities in particular low-tax jurisdictions or adopt particular structures for tax avoidance purposes.
Whilst the Group aims to conduct its business in a tax efficient manner, tax planning is only considered after the Group has determined a particular commercial objective and at which point tax advice would be sought to ensure compliance with legislative requirements. To the extent that there are alternative ways of achieving the commercial objective, or structuring a particular transaction, then the Group may adopt the one which incurs the lowest tax cost whilst achieving the Group’s commercial objectives and respecting the Group’s low appetite for tax risk. The Group will not enter into any non-commercial or abusive arrangements where the only purpose is to artificially reduce the Group’s tax cost.
Where the Government enacts particular tax incentives and / or exemptions that support the Group’s operations and objectives then the Group will seek to apply them in the manner intended. For example, the Group conducts extensive research and development activities to maintain its market-leading product portfolio and therefore benefits from the UK “patent box” regime and Research and Development Expenditure Credits.
Relationship with HMRC
The Group aims to maintain a constructive relationship with HMRC, cooperating fully with enquiries and audits, and working collaboratively to resolve disputes by agreement where possible. For example, the Group is currently participating in HMRC’s 2021 R&D Tax Reliefs Consultation exercise to promote best practice and simplify reporting for companies, such as the Group, that engage in extensive R&D activities. The Board expects the Group’s external advisors to take the same approach and both work proactively to avoid unnecessary challenges and disputes, and to achieve certainty wherever possible as quickly as practical.
Review and approval
This strategy has been reviewed and approved by the Board of Directors of Project Shortway Limited.