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 Valentino England Limited (“VUK” or the “Company”), a UK resident company part of the Valentino Group.
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 Company has a strong focus on responsible tax administration.
Day-to-day tax responsibility sits together with the Head of Group Tax and the UK Finance Manager, who is also responsible to ensure that Company tax accounting representation is appropriate.
The Valentino Group risks and issues, including the ones related to taxes, are considered by Valentino Group management and by the Group Audit Director on a regular basis.
The Board of Directors of VUK is ultimately in charge for the oversight of risk management and governance arrangements of the UK business.
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 of them, the Valentino Group and VUK 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, the Europe Retail Controlling and the Group Internal Audit, but also from external tax advisors and auditors.
Moreover, where appropriate, Valentino Group and VUK consider positively to contact local tax authority (i.e. HMRC) to disclose and resolve issues, risks and uncertain tax positions.
The Company is liable to account for a broad range of UK taxes including corporation tax, VAT, PAYE, National Insurance Contributions, and Stamp Duty Land Tax. VUK is committed to compliance with UK tax law, regulation and disclosure requirements by:
- filing complete and accurate returns on a timely basis,
- paying the right amount of UK tax at the right time,
- seeking advice from external advisors to provide additional expertise where considered appropriate.
Nevertheless the subjective nature of tax legislation means that it is often not possible to fully mitigate all known tax risks.
2. Attitude of UK Companies to tax planning
UK recognizes 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 aims to balance this aspect with the responsibility to its shareholder 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 Company 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 VUK 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 tax disputes wherever possible.
4. Approach towards tax disclosure in favor of HMRC
VUK seeks to meet all legal requirements, preparing and filing all appropriate tax declarations, 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:
- VUK’s relationship with HMRC with the aim of minimizing the risk of challenges, litigations or damages to its reputation,
- VUK’s participation in any tax consultation process where it is expected that the matter under consultation will have a material tax impact on the Group,
- VUK’s collaboration with HMRC in case of tax audit.
Date published: 24th October 2019