Funding the Future: unlocking capital to power the growth we need12:00 am - 1:00 pm
BGF Group PLC Tax Strategy
Year ending 31 December 2021
BGF Group Plc and its subsidiaries ‘The Group’ regards the publication of this tax strategy as complying with its duty under paragraph 16(2) of Schedule 19 of the Finance Act 2016 to publish its Group tax strategy in the current financial year.
Taking each of the requirements of paragraph 16 (2) of Schedule 19 in turn:
Approach of the group to risk management and governance arrangements in relation to UK taxation
Tax risk is the risk that our tax reporting returns or liabilities are inaccurate or incomplete, potentially leading to under or over collection or payment of tax, exposing us to tax authority sanctions as well as potential damage to our reputation. We are subject to the following principal taxes:
- Corporation tax on the profits of our business;
- Employer social security contributions and Apprenticeship Levy on employment costs;
- Value added tax (or its equivalent) on relevant services;
- Income tax and social security contributions from employee remuneration; and
- Stamp Duty
We manage tax risk within our group wide risk management and governance framework. Our Board, by the way of our Audit and Risk Committee, is accountable for risk management and ensures that an effective risk management framework is in place, which encompasses tax risk.
The Group’s tax risks and governance matters are also managed through use of reputable external advisors to provide tax compliance and advisory services. Most of the tax compliance for the Group is outsourced to external advisors, who are responsible for preparation of tax reporting information, tax computations and filings and advising on tax payments where required. Tax compliance is carried out internally by suitably qualified and trained finance personnel, who consult with external advisors periodically as necessary. The group implements policies and controls to ensure transactions are recorded appropriately and that information required for tax reporting is accurate and available to external advisors and tax authorities if requested.
External advisors are also engaged on all material transactions and structuring undertaken by the Group to ensure that tax impacts are understood and correctly accounted for.
All regulated activity (including investment decisions) completed by the Group is undertaken by BGF Investment Management Ltd (‘BIML’). BGF Group Plc and subsidiaries support BIML to enable it to comply with its regulatory requirements. BIML and its parent undertakings must pay heed to its regulatory obligations under the FCA Rules and Principles at all times.
All personnel employed by the group are required to comply with policies and procedures designed to address and mitigate the specific risks of non-compliance with FCA rules that may arise as a consequence of the Group’s activities, which include areas of tax risk.
Our appetite for tax risk is low. Our business model and operating structure is straightforward and not subject to significant judgement in the application of tax law. We do not seek to artificially manipulate our business affairs in order to unreasonably minimise our tax liabilities and aim to pay the right amount of tax in accordance with the spirit of the law in all jurisdictions where we have economic substance.
Attitude of the group towards tax planning
The Group aims to operate the business in a cost-effective manner in line with our obligations to our shareholders. The Group will only utilise legitimate tax reliefs for the purposes for which they were intended by governmental tax authorities in the jurisdictions within which we operate. While we are a minority investor often into existing structures, we do not:
- engage in aggressive tax planning or structures we do not believe meet tax legislation requirements.
- seek to restructure transactions in an artificial manner whereby results are inconsistent with the underlying economic consequences; or
- promote tax avoidance or condone abusive tax practices which would contravene our ethics and culture or the law.
We believe in safeguarding our reputation and our relationships with clients, shareholders and tax authorities alike and we are not subject to undue shareholder influence.
We will seek external tax advice in certain situations, for example:
- in respect of certain structures, we may wish to test the legitimacy of;
- in respect of large, or complex investment transactions, to ensure that we do not suffer any unforeseen or unreasonable tax outcomes;
- in areas where we may have insufficient internal expertise; and
- as a second opinion in cases where we believe there is uncertainty with respect to the application of tax law, although we may also approach HMRC directly, to seek clarity or obtain clearance.
Dealings with tax authorities
In line with the Group’s attitude to tax planning and appetite for tax risk, the Group will always seek to work with tax authorities (primarily HMRC) in a co-operative and transparent matter.
The Group will use advisors to correspond with tax authorities where those advisors have advised on the relevant matter. In other cases, the Group will deal directly with the tax authority although we may seek external advice when doing so.
Business funding news
BGF completes successful exit of Cornwall Insight
BGF has completed a successful exit of Cornwall Insight, following its acquisition by Bowmark Capital. Cornwall Insight is a leading…
BGF’s North West team leads on deals with an EV of £450m
BGF has led on deals with a total enterprise value (EV) of £450 million in the North West in six…