UK Tax Strategy
Business Strategy and Tax Strategy Vision
For more than 120 years, Landis+Gyr (in the following “L+G”) has been one of the industry leaders in energy management solutions. Using advanced metering infrastructure and other cutting-edge smart grid technologies, L+G help utility companies all over the globe improve their operations, protect their assets, lower their operating costs and provide better customer service.
L+G shares a collective vision with utility companies and end-use consumers all over the world: manage energy better. For utilities, this means streamlined operations, cost savings, and more reliable customer service. For consumers, this means a smaller environmental footprint, lower cost options, and ways to stay in control of their own energy usage. By harnessing the power of our industry-leading products and solutions, we can work together to create a smarter grid for the benefit of all.
Our overall vision for tax is to grow our business tax efficiently and in a sustainable way that delivers value to key stakeholders. Our Tax Strategy is aligned with the basic principles of our overall business strategy and to the Group’s approach to corporate governance and risk management. Our overall business “Basic principal” is to give the highest priority to life, safety and compliance with laws, regulations, social standards and ethics, as summarized in the L+G Code of Conduct and reflected in our developing Group Tax Policy. In accordance with this principle, each L+G Group Company shall aim to manage tax matters in compliance with all applicable laws and regulations of the countries where business is conducted, considering the intent of the law, as well as compliance with guidelines published by international organization such as the OECD.
We aim to submit all UK tax filings in a timely manner and it is of primary importance that we are compliant with UK tax law and regulations, and that all required tax payments are made on time.
Approach to tax risk management and governance
We have an established business wide risk management process which is embedded within the business to support the identification and effective management of risks across the business, including tax.
Each L+G Group Company shall act in accordance with the developing Group Tax Policy to achieve the aim of the above mentioned Basic principle, adopting the following five points of guidance
- Improvement of internal controls
- Improvement of Corporate Social Responsibility
- Minimization of tax risks
- Tax Optimization
- Operational Efficiency
Our tax strategy is owned by the Group Tax Function, in particular by the Head of Group Tax, with the Chief Financial Officer responsible for its delivery through our developing tax risk management and governance framework. This facilitates the capturing of key risks, such that they can be mitigated through the operation of effective controls. Our developing tax governance framework is in line with our overall approach to corporate governance and is executed for example through specific tax guidance for the Group.
The Group tax function, who are based in Switzerland, work with the UK finance function to ensure tax is considered at an appropriate stage for key business decisions and transactions. Relevant tax personnel have the appropriate qualifications and experience to perform their roles, whilst technical knowledge is maintained through regular training. External advisors are consulted when complex tax matters arise or when significant transactions occur. This dialogue also allows the tax personnel to keep up to date with changes in tax legislation and obtain guidance.
The Group tax function meet regularly on a monthly basis to discuss key tax matters which may be raised with the Board at the discretion of the Head of Group Tax.
The UK Chief Financial Officer, with support from the Financial Accountant, is responsible for ensuring all UK tax filings are made in a timely manner, compliant with UK tax law and regulations and that any required tax payments are made on time.
Each UK entity has a tax risk register, covering corporate tax, employment tax and indirect tax which identifies UK tax risks and documents procedures and controls in place to mitigate these risks. These forms are part of our UK Senior Accounting Officer, governance framework.
Level of risk we are prepared to accept
Our appetite for tax risk is low. Our level of acceptable tax risk is aligned to our enterprise wide approach to risk management, which is driven by our developing Group Tax Policy which is approved by the Board of Directors. Our business operations are only structured based on sound commercial and business principles.
L+G acknowledges that the elimination of all tax risk is impractical due to the complexity of tax legislation and differences in interpretation that occur. However, the group is committed to the identification and monitoring of significant tax risks within the UK. This is achieved by our developing Group Tax Policy through the following measures:
- Advanced tax risk assessments during the decision making process
- Monitoring of tax return filings, tax payments and tax audits
- Clear specification of responsibilities for managing tax matters
- Appointment of external tax specialists
- Training of tax and accounting staff of L+G Group
Attitude towards tax planning
We do not enter into any aggressive tax planning arrangements but we will consider the most tax efficient structure for a business transaction as long as it is commercially driven and whilst being mindful of our low appetite for tax risk. We will also always engage with our external tax advisors when any significant transaction is undertaken or in areas of complexity.
L+G intends to realize sustainable, sound growth and profit. On this basis and in addition to aiming to being compliant with tax laws and regulations, each L+G Group Company shall strive to take full advantage of any available legal measures, e.g. tax incentives, in order to achieve reasonable and appropriate tax expenses from an optimal group-wide perspective.
The advantages of available tax reliefs, incentives and exemptions, for example available tax deductions on capital investments and research and development credits, are only taken if aligned with commercial and economic activity and are available to comparable UK businesses by the UK government.
When taking advantage of available tax reliefs we strive to follow our code of conduct to ensure tax activities do not cause damage to the brand or compromise business ethical principles as we recognise our reputation is one of our most valuable assets and therefore have the responsibility to foster and protect this.
The supervision of group-wide tax matters of L+G Group are recognized as important issues and are part of the top management’s responsibilities and therefore, the CEO as well as the CFO ensure the involvement of Group Tax Function in all major strategical operational decisions.
Approach towards dealing with tax authorities
In line with our information policy, we aim to maintain consistent, effective, open, honest and timely communications with HMRC. We will engage with HMRC to obtain upfront agreements and/or clearances on uncertain matters.
We will also work with HMRC to answer any queries or resolve any differences in a timely and professional manner, aiming to respond to enquiries by due dates and cooperating fully in our engagement with them.
Our good relationship with HMRC is maintained through our annual risk review meetings. In addition, we also have regular communication throughout the year with our CCM, keeping our CCM up to date on all significant tax matters on a real time basis.
Our published tax strategy applies to all UK companies of the Landis+Gyr group and covers all UK taxes and duties. It has been approved by the Head of Tax and satisfies Schedule 19 of the UK Finance Act 2016 in respect of the period ending 31 March 2018.