Tax strategy and tax risk management

We understand that collecting and paying tax is an important contribution to the economies and societies in which our businesses operate.

The Group’s tax strategy, which covers both the internal governance of tax matters and the approach to tax, is approved by the Board. The tax strategy supports the Group strategy and is focused on ensuring that taxes (and tax risks) are managed to provide sustainable outcomes within the parameters of the Group’s strategic and commercial objectives, and that all tax obligations are complied with in all countries where the Group operates.

The Group’s Governance Manual includes a Group-wide tax risk management framework, with which all Business Units comply. This framework sets out the process for defining tax risk appetite, and for the monitoring, reporting and escalation of tax risks. Material Business Unit tax risks and developments are reported to Business Unit audit and risk committees. The Group Audit Committee receives regular updates from the Group’s Head of Tax on significant tax risks and developments, and approves the approach adopted for tax provisions on material tax items in the financial statements.

We welcome constructive debate on taxation policy. We support the objectives of the OECD projects to modernise the international tax system, and to implement the automatic exchange of information between tax authorities. Where we contribute to tax policy discussions, either individually or through industry groupings, we seek to provide pragmatic, proportionate and constructive comment which respects the particular policy objectives.

We believe that our approach to tax is best demonstrated by disclosing the amounts of tax we pay and collect. These voluntary disclosures are made in the Annual Report. A link to the disclosure in our 2015 Annual Report is included here.