As a responsible business, we act in line with our values in all our business decisions and activities and this is reflected in our tax strategy.
We conduct all of our business activities in the UK and are fully committed to meeting all of our UK tax responsibilities. This means:
- paying the right amount of tax at the right time,
- filing accurate tax returns when they are due, and
- disclosing all relevant information and facts to HM Revenue & Customs (HMRC) in respect of those payments and returns.
Our approach to tax risk management and governance
Risks arise in all areas of our business and tax is no exception. The Board is responsible for ensuring there is an appropriate framework in place for the identification and management of tax risk, which is managed as part of our overall internal financial controls and Enterprise Risk Management Framework.
This means we actively identify and evaluate tax risks within the business and then implement controls to manage those risks. The controls are regularly monitored and reported on to ensure that the risks continue to be effectively managed.
Where there is uncertainty in relation to any particular tax risk due to the complexity or uncertainty of the legislation, we may seek external advice to help ensure that we fully understand the risks and that we meet all of our UK tax responsibilities.
Ultimate responsibility for our tax strategy and its implementation rests with the Board and it is reviewed at least annually and updated if required.
The Chief Financial Officer is the Board member with executive responsibility for tax.
The level of risk we are willing to accept in relation to UK taxation
Our appetite for risk in respect of tax is low, which is in line with both our ethical values and our philosophy of being a below median risk mutual. This reflects the strong belief of the Board that we should fully meet all our tax responsibilities and ensures we maintain our reputation as an ethical business.
Our attitude to tax planning
Our low appetite for tax risk means that we will only undertake tax planning in respect of the Society, its employees and its members where it relates to claims made for tax incentives, reliefs and exemptions that we are entitled to and then only in the manner that they are intended to be used. Examples include claiming tax relief on capital expenditure and offering ISA products to our members.
This approach means we will not engage in tax planning that is not within both the letter and the spirit of tax legislation.
Our approach to dealing with HMRC
We believe it is in the best interests of our members to maintain an open and collaborative relationship with HMRC, and encouraging positive relationships with HMRC is an important part of our culture and strategy.
In practice this means we will be straightforward in our dealings with HMRC and at all times act with honesty, integrity, respect and fairness.
In the event of inadvertent errors arising in respect of our tax responsibilities, these will be corrected and the appropriate disclosure made to HMRC as soon as possible.
We are publishing the above tax strategy, in compliance with paragraph 16(2) Schedule 19, of Finance Act 2016, for the year ending 31 December 2020. The strategy applies to Coventry Building Society and all of its subsidiaries, and has been approved by the Board.