We pay corporate income taxes, social security contributions, business rates, customs duties and numerous other taxes and levies. In addition, we devote significant effort on behalf of HM Revenue and Customs and overseas tax authorities to administering and collecting indirect taxes such as VAT from our customers and employment taxes from over 4,000 employees globally. We are committed to paying and collecting these amounts in compliance with the law, in a responsible manner and maintaining constructive relationships with tax authorities. Ultra’s corporate ethics policy requires all employees, businesses and third parties, who act on Ultra’s behalf, to comply fully with the Group’s standards of business ethics and with applicable laws and regulations. The approach outlined below is not new and has been operated by Ultra for a number of years.
Tax risk management
Ultra manages tax risks under the same risk management framework as other risks the Group faces. Our approach to risk management is explained in some detail in the strategic report published with the Group’s annual accounts. In the UK, we reassess annually whether we have appropriate tax accounting arrangements, to ensure the integrity of our tax returns and timely and accurate tax payments, as required by the Senior Accounting Officer (“SAO”) legislation. We maintain a tax function of suitably qualified and experienced professionals to manage our tax affairs and they are supported by external advisers as necessary.
Ultra has to take account of the impact of tax on shareholder value. The tax regimes we are subject to are complex and present significant scope for both adverse tax consequences and tax advantages. When undertaking substantive business transactions, such as new investments and divestments, it is necessary to plan to mitigate tax, consistently with those commercial transactions and our business objectives, in order to maintain shareholder value and commercial competitiveness. However, we also have obligations to notify certain customers and may have contracts terminated if we are involved in failed tax avoidance. Accordingly, while seeking to make effective use of government sponsored tax incentives and planning to mitigate tax, we seek to minimise the risks of uncertainty or disputes and do not engage in artificial arrangements.
Oversight of the risk management framework is by the Audit Committee which also considers the adequacy and sufficiency of the disclosure and the appropriateness of the accounting treatments adopted, to reflect the Group’s tax affairs in the Annual Report. In addition, the tax consequences of major business transactions are specifically considered by the Board and the overall tax position of the Group is regularly reviewed by the Board. Our finance teams have responsibility for many of the taxes we pay and much of the tax we collect on behalf of tax authorities. They are accountable to the Executive Team and the Board for the procedures they operate. In the UK specific assurance is given annually to support the SAO certificate.
Relationship with the tax authorities
We aim to maintain relationships with tax authorities that are constructive and based on mutual respect. We cooperate fully with audits and enquiries and wherever possible work collaboratively to resolve disputes and expedite early agreement of issues and uncertainties. We expect our external advisers to take the same approach. This document was approved by the Board on 27 July 2020, has applied throughout 2020 and remains in force as at February 2021. The publication of our tax strategy is required by Schedule 19 Finance Act 2016.