An efficient, experienced and specialist in-house tax team providing an excellent service to all stakeholders within the Group will assist the Group in achieving its overarching vision:
Places for People Group is one of the largest property and leisure management, development and regeneration group of companies in the UK. The Group owns or manages over 180,000 homes in the UK and provides services to over 500,000 people.
1. Tax Compliance
To achieve total compliance in all taxes including timely filing of returns and payments. We extend our approach to compliance as including the provision of professional and prompt responses to queries and questions raised by external and internal stakeholders, including HMRC and colleagues.
Roles and Responsibilities
The Group Board and the Audit & Risk Committee are responsible for the Group’s Tax Strategy. The implementation of the strategy is delegated to the Group’s Director of Tax & Treasury, who in turn delegates this to the Group’s Head of Tax.
The Group Executive Director – Finance is ultimately responsible for communicating and advising on tax issues and risks to the Board and the Audit & Risk Committee.
The operation and implementation of other tax compliance matters is appropriately delegated, ie,
a. Corporation tax returns – prepared by the tax team and signed by the Head of Tax.
b. VAT returns – prepared by the tax team and signed/authorised by the Head of Tax or the VAT Manager.
c. Stamp Duty Land Tax Returns – prepared by external solicitors dealing with conveyance/transaction and signed/authorised by the Head of Tax or the VAT Manager.
d. Payroll and Employment taxes – prepared by in-house payroll teams and submitted/authorised by a payroll manager. The tax team is consulted in connection with any non-routine issues arising.
e. Tax reporting in the financial accounts – prepared by the tax team as authorised/reviewed by the Head of Tax.
f. Managing relationship with HMRC – the importance of this is not underestimated by the Group. The Head of Tax leads the relationship with HMRC involving regular contact with our Customer Compliance Manager (CCM) and his team at HMRC’s Leeds Large Business Service. All members of the tax team are encouraged to develop and maintain this relationship.
g. Managing relationship with external advisors – whilst the tax team deals with almost all of the Group’s need for tax services, it is very important to develop and maintain contact with various specialists at external firms of accountants or solicitors. The Head of Tax takes the lead in this area but all of the tax team are encouraged to maintain relationships with external advisors.
Senior Accounting Officer
Finance Act 2009 introduced legislation requiring large companies to certify to HMRC that they are taking reasonable steps to ensure that “appropriate tax accounting arrangements” are in place. Non- compliance is likely to lead to corporate and personal penalties.
Certain specified companies are not included within the SAO regime including Co-operative and Community Benefit Societies. This exclusion means that we do not have to certify for the large Registered Providers within our Group. Whilst we do not have to certify for our Registered Providers, we do maintain the same high level of tax risk management, tax processes and tax accounting arrangements for those companies. The tax team ensures that over 100 companies within our Group are certified under the SAO provisions on an annual basis.
The Group’s Senior Accounting Officer is our Group Executive Director - Finance.
2. Paying the right amount of tax
To ensure that the Group’s processes and procedures are established and implemented in a way in which the right amount of tax is calculated and paid to the relevant tax authority. This principle will apply to the cyclical and routine operations of the Group’s business as well as tax liabilities potentially arising from one off transactions.
We incur tax liabilities in respect of corporation tax, VAT, PAYE and National Insurance and we actively implement processes and tax efficient operations which will result in our paying the appropriate amount of tax.
The Group’s Net Tax Contribution
The Group has contributed approximately £55m in the year ended 31 March 2019 and an estimated £52m for the current year ending 31 March 2020. This does not include output VAT or any tax or NIC deducted from our employees’ salaries.
3. Approach to tax planning
In striving to pay the right amount of tax, the Group will only consider mitigating tax liabilities by reference to established legislation, case law, concessions and practices. We will only look to mitigate a tax liability in this way if it complies with the intention of the law.
The Places for People Group encourages ethical and transparent business practices and actively seeks to work alongside other key stakeholders including in particular, HMRC. We consider that this is imperative in helping us to arrive at a balanced and non-aggressive approach to tax planning.
Whilst the Group does look to pay the right amount of tax, we do utilise any tax reliefs made available to taxpayers by the law including from legislation, case law and prevailing concessions and practices. We are aware that in certain circumstances it may be possible to legally take advantage of those same tax reliefs in a way which does not reflect the commercial reality of a particular situation or, in a way which does not reflect the true intention of the law.
The tax team use their significant and wide ranging experience to employ routine tax planning always with an emphasis on ensuring that if we minimise a particular tax cost, it reflects the commercial substance of the business and/or the particular transaction. For non-routine or complex transactions, the Head of Tax would decide on the appropriateness of the planning and if necessary, this would be involve the Director of Tax & Treasury or the Group Executive Director – Finance.
4. Managing Tax Risk
We undertake to review the Group’s processes and procedures with a view to identifying tax related risks. Our reviews are conducted on a regular basis with the frequency of the reviews being determined by various factors including the quality of the compliance record, previously identified risk areas, actions taken since the last review, complexity and the scale of the amounts involved.
A key part of managing risk will be to produce a risk matrix to assist the Group in the identification and monitoring of risk and to ensure that the appropriate action plan is implemented.
Much of the Group’s activities are regulated by the appropriate housing authorities in England and Scotland. Places for People Group owns or manages over 209,000 housing units. The Group also has significant activities which are not regulated by the housing authorities including property management, development and construction, leisure and fund management. The diverse and complex nature of our Group’s activities, requires us to have the tax resources to implement this tax strategy and the underlying processes with the objective of minimising tax risk.
There are various measures in place ensuring that the risk of non-compliance or paying excessive amounts of tax including:
a. Closely aligning our reporting in relation to the Senior Accounting Officer requirements, so that our processes as they affect tax are monitored on an annual basis by the tax team.
b. The tax team conduct a rolling programme of detailed VAT reviews of all businesses within the Group.
c. A strong in-house tax team with expertise in a wide range of tax specialisms. The tax team is well supported by the wider Finance function in terms of regular and frequent tax training which is so vital in the constantly changing discipline of tax.
d. The Group recognises that external specialist tax advisors should be utilised when appropriate, ie, usually on very high value or particularly complex transactions.
e. The Executive Board and Audit & Risk Committee are regularly updated on developments in tax law and practice for the Group at a strategic level.
f. Developing a tax risk matrix to assist in monitoring and minimising risk associated with all areas of tax.
We believe that pro-active and open communication between the tax team and all stakeholders both within and outside the Group is the most effective means of ensuring that tax risk is monitored and managed as effectively as possible.