Year ended 31 December 2017
Mundipharma IT Services Ltd (MITS) is a UK company that provides IT solutions and support to independent associated companies. The independent associated companies are part of a global network of private international businesses.
This network of global companies (of which MITS is one) is passionately committed to improving the health and quality of life of patients everywhere. Our tax strategy is an integral part of this commitment, and our business in the UK contributes a substantial amount both to the government through the payment and collection of tax and to the wider UK economy.
The purpose of this document is to set-out MITS’s strategy towards UK taxation and has been prepared in accordance with the requirements of the Finance Act 2016 Schedule 19, paragraph 22(2).
The document covers:
- Our approach to tax risk management and governance;
- Our attitude towards tax planning;
- The level of tax risk that we are prepared to accept; and
- Our approach to dealings with HMRC.
In overview, we pursue a tax strategy that is principled, transparent and sustainable in the long term. Our shared values underlie our approach to taxation, and we address items 1 to 4 below.
1. Tax risk management and governance
Tax risk, and particularly the reputational component, extends beyond MITS’s relationship with tax authorities and impacts almost every area of MITS, including our relationship with shareholders, staff, management, the directors and all other stakeholders. Tax risk and its impact on stakeholders is managed by the directors in meeting their fiduciary duties to shareholders.
Tax risk is like any other risk that our business faces in that it should be identified, controlled and reported upon.
It is acknowledged that tax positions and the risks associated with these can be uncertain and we manage this uncertainty by:
- Strong compliance procedures ensuring accurate and complete tax returns, including robust and well documented transfer pricing policies;
- Having strong technical support for tax positions, including opinions from external advisors:
- Clear explanation and documentation of those positions, especially facts and business substance; and
- Maintaining well established relationships with HMRC.
Business tax processes are subject to the same high level of internal controls and external assurance processes as any other area of our business. Performance is monitored via regular reporting to the Finance Director and Executive Management Team as appropriate.
We obtain support and advice from appropriately qualified external advisors on UK tax matters. We see the input of external advisors as a key source of tax expertise to supplement the skills of our finance team.
2. Attitude to tax planning
Tax is an important factor in many business decisions and tax planning in support of commercial activity is normal and appropriate. MITS does not engage in aggressive tax planning, that is planning that has been defined by the OECD as:
- Planning involving a tax position that is tenable but has unintended and unexpected tax revenue consequences; or
- Taking a tax position that is favourable to the taxpayer without openly disclosing that there is uncertainty whether significant matters in the tax return accord with the law.
MITS engages external tax advisors as part of managing the desired risk profile and to provide specialist tax expertise to supplement the skills of our own finance team as required.
3. Tax risk tolerance
MITS tolerates a low level of risk in taxation matters. Taxes are managed with the objective that all tax liabilities properly due under the law are correctly recorded, accounted for and paid at the correct time.
4. Approach to dealings with HMRC
MITS view HMRC as a key stakeholder in our business. As such we work proactively and transparently with HMRC and our Customer Relationship Manager (CRM), including ensuring that they have access to relevant information evidencing taxation matters.