Tax strategy 2023

Our tax strategy supports the way we do business, our culture, and how we conduct our own affairs. It underpins our Purpose and influences the decisions we make.

We operate a robust culture which is encapsulated within our Code of Conduct. This culture is built on ethics, individual responsibility and integrity to do the right thing. These principles provide the strong bedrock for how we conduct our own affairs, including our tax affairs, as well as how we work with our clients.

Our corporate sustainability agenda has also helped frame our tax strategy. This agenda is founded on the following guiding principles:

• Upholding professional standards

• Being transparent and fair

• Fostering a culture of collaboration, and

• Valuing the longer term consequences of our decisions.

Our Corporate Sustainability and contribution to the UK economy

Approach to managing risk and developing good governance in relation to taxation

We are committed to being a responsible and compliant taxpayer in the countries where we operate and we do this through robust governance, and clearly defined processes and controls.

• The responsibility for our tax affairs rests with our Chief Operating Officer (“COO”) who is a member of our Executive Board. Our Supervisory Board also provides governance over our UK tax affairs.

• Our COO delegates the day to day management of our tax affairs, through the operation of our tax function, to our Designated Tax Partner (“DTP”). Our DTP is authorised to make decisions and sign filings and other documentation in relation to our tax affairs on behalf of all of the partners of the firm.

• We maintain robust processes and controls which are designed to minimise the risk of errors arising which could impact the amount of tax that we pay. These processes and controls are regularly monitored, reviewed and tested and underpin the submission of returns for our firm, for our partners and, as an employer, for our staff.

• We undertake any transactions, and maintain relationships with other non UK PwC member firms on an arm’s length basis. 

How we structure our affairs

• Our guiding principles and codes of conduct govern how we manage our own tax affairs. These are supported by both underlying detailed governance and risk management frameworks.

• When structuring our affairs we will only ever do so based on sound commercial purposes and we will never act in a way that we believe could be considered inconsistent with our understanding of the intention of Parliament or which could be contrary to any anti abuse legislation.

• Our internal controls and reporting lines aim to ensure that any part of our business intending to undertake a transaction or activity, as respects our own tax affairs, which is outside the normal course of our business model must always seek approval from our DTP. This is a practice which drives our consistent approach to structuring our affairs.

Managing risk in relation to taxation

We have developed a detailed framework of internal controls to provide a robust and comprehensive approach to managing risk in relation to the taxation of our own affairs. This framework is structured to deliver a level of governance and oversight which is consistent with the standards we adopt to our work when undertaking our broader client engagements. 

This detailed framework is based on the six elements of internal controls and internal quality controls.

1. Leadership responsibilities for quality within the firm

2. Human resources

3. Relevant ethical requirements

4. Engagement performance

5. Acceptance and continuance of client relationships and specific engagements

6. Monitoring

The framework, along with our other financial and operational systems, are subject to a rolling independent review by our internal audit team with results reported to our COO and Executive Board.

Our robust and comprehensive approach to managing risk in relation to tax is underpinned by:

Our partners are also required to conduct their personal affairs in a way which is aligned with our Code of Conduct.

Dealing with tax authorities

We engage openly and constructively with HM Revenue & Customs on matters relating to our tax affairs. We share information about our commercial developments or transactions, especially where there are complex tax treatments. Where necessary we will seek formal or informal clearance from HMRC on uncertain tax positions insofar as they relate to our tax affairs.

Tax can be very complex so we approach our obligations with an appropriate level of analysis and consideration. Where we cannot reach agreement with HMRC on the proper interpretation of law, and there is no other practical means of achieving agreement, we may test the matter in the Courts. We aim to collaborate appropriately with HMRC on the conduct of such actions.