Group Tax Strategy
Melitta UK Limited. – UK Tax Strategy
- 1. Introduction
This tax strategy covers Melitta UK Holdings Ltd. and its’ UK subsidiary. The Directors of the Company consider the ultimate parent company to be Melitta Group Management GmbH & Co. KG, a company incorporated in Germany.
The Company strategy, and that of the ultimate parent company, is focussed on sustainably growing the business through strengthening brand equity by means of profitable market leadership.
The tax strategy is fully aligned to the above overarching Corporate strategy. The objective is to ensure the submission of tax filings, the remittance of tax liabilities on a timely basis and that the Company remains compliant with the relevant tax law and legislation.
The strategy with regard to taxation is consistent with the Group risk management policy, in that it is aimed at the structured identification and assessment of risk exposure and takes the necessary measures to recognise, evaluate, analyse and counteract those risks where appropriate.
The published tax strategy applies to all UK subsidiaries of the Melitta UK Holdings Group and covers all UK taxes. It has been approved by the Board and satisfies Schedule 19 of the UK Finance Act 2016 in respect of the period ending 31 December 2019.
The responsibility for UK taxation is as follows:
- the governance and policy of the Company in relation to UK taxation lies with the Board of Directors
- the Head of Finance has executive responsibility for implementing and delivering the taxation policy by ensuring that an effective internal control framework for taxation/finance is maintained over the day-to-day management of the business operations of the Company
- the Head of Finance is tasked with the employment of sufficiently qualified and trained staff, thus ensuring that the Finance department is fit for purpose to implement the necessary tax controls required for the day-to-day management of the administration and payment of UK taxation
- the tax management of the Company is to be augmented by regular dialogue with Group Tax and Finance departments
- 2. Tax Risk Management
The Company’s objective of its tax risk management is to ensure it aims to remain compliant with the relevant and applicable tax law and legislation and pays the correct amount of tax at the right time in the UK.
The Company operates an effective tax control framework in order that it can identify and assess key current and future risks and apply mitigating control activities in order to decrease any inherent risk associated with UK taxation, such that this risk is reduced to an acceptable level. Structured identification and assessment of risk exposure, in accordance with the Group approach to risk, will ensure that an acceptable level of risk is delivered, in accordance with the risk identification criteria.
The Head of Finance is responsible for ensuring that an effective framework is in place and that there are effective channels of communication and monitoring to ensure that any identified risks or changes in business are escalated primarily to the Head of Finance, who then has responsibility for communicating these to the Board.
Channels of communication are:
- regular Board meetings
- regular risk inventory workshops where business risks are discussed, quantified and reported to Group according to agreed criteria
The Company reduces its tax risks by consulting with external professional firms where additional expertise and clarification is required. Advice is sought from them on the tax impact of:
- significant transactions
- changes in business
- recent legislative changes
Furthermore, the Company requests external advisors to prepare or review all statutory UK Corporate Tax returns.
- 3. Attitude Towards Tax Planning and Acceptable Level of Risk
The Company has a conservative approach to tax risk and seeks to minimise the risk of uncertainty or differences in the interpretation of tax legislation. The Company realises that it is not always possible to remove task risk completely, but has the aim of managing the level of risk to one that is acceptable in the terms of the tax risk and governance framework and with the overall Company approach to risk management.
The Company utilises a tax risk framework to assess and monitor all tax risks and does not undertake purely artificial transactions in order to obtain a tax benefit. All transactions undertaken by the Company are driven by a clear business purpose or commercial rationale and the Company aims to consider a range of tax outcomes and utilise the most efficient, while maintaining compliance with all legal tax requirements.
The implementation of aggressive tax planning schemes would disconnect from the conduct of the business and are therefore not undertaken.
The Company does utilise approved HMRC schemes where appropriate: Patent Box relief would be an example of such an allowance.
- 4. Relationship with HMRC
The Company aims to be transparent and proactive in all tax matters with HMRC.
Primary responsibility for liaising with HMRC resides with the Head of Finance, who is likely to engage with HMRC in connection with:
- significant/uncertain transactions, possibly requiring up-front tax clearance
- errors/omissions with regard to tax filings
- interpretation of legislation/guidance
The Company is prepared to engage in proactive discussion to get an agreement with HMRC and close HMRC enquiries in a timely manner.