UK Tax Strategy
This document has been prepared and it is intended to satisfy the reporting obligations foreseen under paragraph 16(2) of Schedule 19 of the Finance Act 2016.
This document will apply to the following UK companies of the Valentino Group:
- Valentino England Limited (VUK),
- VFG UK Limited (VFGUK),
these two together defined as the “UK Companies”.
In Valentino Group, a strong focus is dedicated to the corporate responsibility, where a responsible administration of tax matters and the accurate payment of taxes are two of its pillars.
1. Approach of the Valentino Group and UK Companies to risk management and governance arrangements in relation to UK taxation
1.1 Tax Governance
The Valentino Group risks and issues related to taxes are periodically considered by Valentino Group management and by the Group Audit Director on a regular basis.
Day-to-day tax responsibility for each of these areas sits together with the Head of Group Tax and the UK Finance Accounting Manager.
1.2 Tax risk management
Presently the Valentino Group has companies in 24 countries (including the UK) and it is exposed to a variety of tax risks as follows:
- tax compliance and reporting risks,
- transactional risks,
- reputational risks.
In order to mitigate all these risks, the Group and the UK Companies aim to put in place the resources, governance, processes and controls necessary to ensure that local tax filings and reporting are robustly prepared. The business is supported by different functions, including the Group Tax, the Group Controlling and the Group Internal Audit, but also from external tax advisors and auditors.
Moreover, where appropriate, Valentino Group and the UK Companies consider positively to engage with local tax authority (as the HMRC) to disclose and resolve issues, risks and uncertain tax positions.
Nevertheless the subjective nature of tax legislation means that it is often not possible to mitigate all known tax risks.
2. Attitude of UK Companies to tax planning
UK Companies recognize to have a responsibility to pay an appropriate amount of tax in the UK jurisdiction (the same approach is adopted by the Group in each jurisdiction where operates).
VUK and VFGUK aims to balance this aspect with the responsibility to their Shareholders to structure the affairs in an efficient manner, in a way that the economic benefits associated with tax planning must never override the compliance with all applicable laws.
Consequently the UK companies will ensure that:
- tax planning and arrangements are simple, based always on business purpose and well-understood.
- business teams understand and consider the tax risks in order to minimize any exposure.
3. Level of risk in relation to UK taxation that the Group is prepared to accept
The Valentino Group’s tax approach requires that, where tax law is unclear or subject to interpretation, the tax position is at least more likely than not to be allowable under applicable tax laws.
Consequently the UK Companies will utilize all available tax reliefs and tax incentives where available in a manner which is consistent with the interpretation of the tax law and the as much as possible in line with the HMRC position.
This is the best position to avoid unnecessary and time consuming disputes wherever possible.
4. Approach towards tax disclosure in favor of HMRC
VUK and VFGUK seeks to meet all legal requirements, preparing and filing all appropriate tax filing, tax reporting and tax payment obligations.
Valentino Group seeks to foster good relationships with local tax authority, and so with HMRC, in particular pro-actively supporting:
- UK Companies’ relationship with HMRC with the aim of minimizing the risk of challenges, litigations or damages to its reputation,
- UK Companies’ participation in any tax consultation process where it is expected that the matter under consultation will have a material tax impact on the Group,
- UK Companies’ collaboration with HMRC in case of tax audit.