UK Tax Strategy
In September 2016, the Parliament of the United Kingdom ("UK") enacted the Finance Act 2016 (the "Act"), which introduced a new requirement for all large businesses operating in the UK to publish a Tax Strategy Statement disclosing the following:
- The approach of the business to risk management and governance arrangements in relation to UK taxation;
- The attitude of the business toward tax planning as it affects UK taxation;
- The level of risk in relation to UK taxation that the business is willing to accept; and
- The approach of the business in dealing with Her Majesty’s Revenue and Customs ("HMRC").
In accordance with the Act, Blackhawk Network (Europe) Ltd. issues this Tax Strategy on behalf of itself and all UK entities in its group (the "Group").
- Risk Management and Governance Arrangements
The Group’s policy is to comply with all relevant laws, rules, regulations, reporting and disclosure requirements and to timely pay the correct amount of tax to all taxing authorities with which the Group has a tax obligation.
The Group has established a regular and ongoing review of its tax risks with strong internal controls in place to substantiate and mitigate its tax risks to materially acceptable levels. As part of this process, the Group maintains tax risk metrics, and assesses their likelihood of crystallization, materiality and potential impact on the Group if the risk becomes definite. These metrics are subject to thorough quarterly processes to ensure that they are regularly and continually reviewed and that the risks are appropriately managed. Detailed documentation of these reviews is maintained, which, if necessary, allows them to be raised up through the appropriate levels of management and/or the HMRC as required.
- Attitude Toward Tax Planning
In structuring its commercial activities, the Group routinely considers, among other factors, the tax laws of the countries in which it operates and intends to operate with a vision to maximize value on a sustainable level for itself and its affiliates, its members and the communities with which it does business. Any and all commercial and economic endeavors the Group pursues will not in any way be contrived or artificial in nature for the sole purpose of reducing tax. The Group will consider transactions that give rise to tax efficiencies, are tax compliant, and are aligned with its objectives as discussed herein. The Group will not engage in tax efficiencies if the underlying commercial and economic values do not support the Group’s reputation, brands, corporate and social responsibilities, or future working relationship with HMRC and/or any other taxing jurisdiction in which the Group operates.
- Acceptable Level of Tax Risk
In accordance with the strategy approved by management, the Group takes a conservative approach to tax risk. The Group actively seeks to identify, evaluate, monitor and manage these risks. With respect to transactions in which there could be significant uncertainty or complexity as to the tax treatment, the Group customarily seeks advice from external advisors and proceeds accordingly. The Group is aware of the potential for negative impact caused by asserting unsupported tax positions, and deems robust internal processes and alliance with external tax advisors as a way to manage this risk. The Group seeks to ensure that its tax arrangements remain consistent in approach from both a financial and reputational standpoint.
- Approach in Dealing with HMRC
The Group seeks to comply with all tax reporting requirements and payment obligations globally. In fostering a good relationship with HMRC, the Group engages with HMRC with honesty, integrity, respect and fairness and in an effort to full cooperate. The Group aims to avoid unnecessary disputes with HMRC by continuing to interact in real time as much as possible, where appropriate, seek pre-transaction clearance from HMRC, and making tax compliance procedures, controls and records readily available for review by HMRC upon request.
This Tax Strategy has been communicated to all relevant stakeholders within the Group such that it is firmly embedded in its culture. This Tax Strategy will be subject to continuous review by these stakeholders to ensure that the Group is adhering to its strategic goals. Such reviews will be documented and made available to management as part of its annual review.