UK Tax structure – Areas of Interest for Companies

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Most of the FTSE100 companies have published their public tax strategies from December 2017 in line with regulations that require large companies to produce their tax strategies for accounting periods starting from September 15, 2016, coming into effect.

How large companies UK tax structure and strategies can influence your business…

Most companies are interested in learning how their UK tax structure and strategies compare with others, how it will be implemented under the UK tax system and elsewhere; as well as how things will be interpreted.

The range of disclosures made by FTSE100 companies varies in length from 100 to 2,500 words with the average being 600 words.

The approaches are just as different with the focus varying from transfer pricing and low tax jurisdictions to how the strategy would be implemented in practice. If the words used in these company statements are any indication, most give prominence to management, governance, compliance, risk and authorities (areas required by the UK tax legislation) and audit committee, board, transactions and planning.

Pay Close Attention to Detail

It’s interesting to pay attention to the detailed discussions on the role of the board and audit committee on a company’s tax affairs. The practical application of an organisation’s tax strategy and how its success is monitored by various groups have been approached in different ways, as indicated by the discussion on governance over tax at a senior level. References to specific frameworks and a review of controls indicate that the strategy is supported by operational practice, internal governance and control systems.

A fewer number of companies focused on stakeholders, value and responsibility. Determining one’s strategic response to tax transparency is key when acknowledging the interests of different stakeholders. There are certain companies that are focused beyond the statement of compliance when it comes to UK tax legislation and tackle areas such as tax as a corporate responsibility issue and tax in the context of business functions.

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