Cabot Credit Management

Tax Strategy

Cabot Credit Management

Tax Strategy (2020)

This document, approved by the Board of Cabot UK Holdings Limited, is considered to comply with the requirements set out in paragraph 19, Schedule 19 of the Finance Act 2016 in connection with publishing the tax strategy in relation to the period ending 31 December 2020 for the Cabot Credit Management Group (“CCM” or “The Group”).

  1. Board Statement

The Group will ensure that we comply with all tax laws in the jurisdictions in which the Group operates, paying the tax we are legally required to pay, whilst acknowledging our responsibility to protect shareholder value through appropriate management of the Group’s tax liabilities. The Group will ensure that tax risk is identified, assessed, reported and monitored. The Group will maintain an open and transparent relationship with the tax authorities in the key jurisdictions in which the Group operates, and act responsibly and with integrity in all such dealings.

  1. Approach to tax risk management and governance arrangements

The Group’s Enterprise Risk Management Framework (ERM) supports the Business providing a record of current, emerging and potential risks faced. The framework supports effective risk management, through identification, assessment and managements of the risks associated with each business area. The register includes tax affairs for the relevant parts of the Business enabling these Risk Owners to control and report on the associated risks and help to ensure alignment with the wider Group’s strategy.

The Group has a documented tax policy, which in conjunction with compliance with the Senior Accounting Officer provisions and the aforementioned Enterprise Risk Management Framework, seek to demonstrate CCM’s overall approach to taxation and risk.  The intention is to provide assurance to HM Revenue & Customs (“HMRC”) and other relevant stakeholders that the senior members of the Group have appropriate oversight and management of tax processes, procedures and controls.

Tax risks are assessed and monitored on a case by case basis with respect to the quantum of impact (financial or otherwise, including reputational) with appropriate decision making taking effect having regard to the Group’s Delegated Authorities Framework.  In the event of a material uncertain tax position existing, advice would be sought from external advisors.

The Chief Financial Officer has primary responsibility for tax governance and strategy with oversight of the Board and the Audit Committee, and the day-to-day responsibility of CCM’s tax affairs resides with the Head of Tax.

  1. Tax planning

The Group’s tax strategy seeks to ensure we comply with all tax laws in the jurisdictions in which the Group operates, paying the tax we are legally required to pay, whilst acknowledging our responsibility to protect shareholder value through appropriate management of the Group’s tax liabilities.

CCM will consider utilising incentives or opportunities for obtaining tax efficiencies where these:

The Group would not contemplate entering into transactions which are demonstrably contrived and would deliver negligible purpose other than tax avoidance.

  1. Assessment of tax risk

CCM’s primary intention in relation to taxation, insofar as is possible, is to ensure full and timely compliance with all relevant legislation and guidance in order to minimise the risk of incremental tax liabilities, tax-geared penalties and reputational damage at a later date. 

The Board does not have strict levels of tax risk appetite and commercial decisions are made on a case by case basis, albeit noting that tax affected considerations are determined with respect to the parameters set out in the “Tax planning” section above.

External advice is sought in the event of all transaction related activity and uncertain material positions, however we would not pursue a course of action which is incompatible with statements made elsewhere in this document.  

  1. Approach towards dealings with HMRC

CCM is committed to the principles of transparency and openness in its dealings with HMRC, and maintains open dialogue with HMRC on developments in the Group’s business and significant tax issues.

The Group’s intention is to consistently make fair and accurate disclosure in correspondence with HMRC and tax return filings, and respond to queries and information requests in a timely fashion.  In the event of material unclear positions arising with respect to an interpretation of tax law, we would endeavour for early agreement and to obtain certainty where possible.

To the extent that inadvertent non-compliance is identified, the Group would seek to make an unprompted disclosure to HMRC on a timely and transparent basis.