We manage our tax affairs in a balanced and effective manner, which ensures compliance with all fiscal obligations and consistency with international best practice guidelines. We seek to achieve this by pursuing the tax objectives described below which are aligned to the wider business strategy and underpinned by our core values of treating customers, partners, suppliers and each other with honesty, integrity and respect.
We operate effective business relationships, allowing the provision of real time commercial advice on tax for all relevant transactions and activities (Business partnering). In support of the group’s key focus on business relationships, the Clarks tax team works closely alongside finance and the wider business. Our key value of maintaining integrity and quality is supported by frequent contact between the teams, which ensures that the tax team maintains a deep understanding of the group’s activities. This also means the tax team can provide accurate and real-time advice on the tax implications of any business decisions. We provide training and development opportunities for our employees to ensure they are appropriately trained in their roles and able to provide the best advice to the wider business.
We ensure integrity and honesty is at the heart of our operations by implementing effective tax governance, with a view to continuous improvement in our approach to managing tax risk and opportunity (Our tax risk and how we manage it). Clarks has a low appetite for risk and as such, we conduct detailed tax risk assessments on any business proposals which are being considered. These are presented to the Chief Financial Officer for review. In support of our goal of operating with integrity and honesty, we operate an effective tax control framework that ensures we have the right control environment, as well as appropriate activities to identify and manage tax risks. We maintain appropriate and documented transfer pricing policies and ensure these are followed consistently, allowing us to meet our responsibility to pay tax where profits arise. We undertake to review our tax governance on a regular basis to ensure key controls are both designed and operating effectively and to assess whether improvements can be made. Having an effective tax governance framework which is under constant review and improvement is also key to supporting our annual Senior Accounting Officer (SAO) sign off in the UK.
We put the consumer at the heart of what we do, managing costs by being tax efficient and considering government sponsored tax incentives, but we will not engage in aggressive tax planning which goes against our social responsibilities (Attitude to tax planning). We will adhere to tax regulations and will not consider tax planning which is aggressive or which is based on non-commercial activity. Our directors have a fiduciary duty to avoid unnecessary tax costs but any mitigation of tax cost will always be within the letter and spirit of the law. By acting in this way, we are able to ensure that we are behaving responsibly towards the communities in which we and our suppliers operate and are living up to the expectations of our consumers. We will consider tax incentives which are available for tax payers to use and will adopt these only where they are relevant to the business and are operated within the spirit that they were intended. A detailed risk assessment will be undertaken if there are any doubts as to the correct application of tax law, and where appropriate expert advisors or the relevant tax authority will be consulted.
We work in a professional, honest and open way with tax authorities, promoting transparency to avoid unnecessary disputes (Working with HMRC). We are open and transparent with tax authorities about the group’s tax affairs and work collaboratively to achieve early agreement on disputed issues. This ensures we achieve certainty on a real-time basis and avoids costly disputes. By operating in an open and honest way with tax authorities, demonstrating our robust approach to managing tax, we strive to ensure that a low risk status is maintained in the eyes of the tax authorities. We operate with integrity in our compliance and reporting by understanding our business and ensuring a high standard of work from our people. To ensure compliance is handled correctly, we use professional advisors where there is insufficient local knowledge.
Our published UK tax strategy has been prepared to satisfy our commercial objectives and comply with UK legislation as set out in the Finance Act 2016