Tax strategy statement
Objectives of CVS tax strategy
The objective of CVS’s tax strategy is to pay the correct amount of tax as it becomes due, to balance the need to build and maintain trust with stakeholders (including the UK Government and relevant tax authorities) and to maximise the return for investors.
CVS’s approach to its tax strategy is driven by the following objectives:
- Acting with honesty and integrity. Honesty and integrity are at the heart of our Group’s cultures and values. Our aim is to be trusted by all of our stakeholders.
- CVS will be transparent, proactive and open in its dealings with relevant tax authorities.
- Compliance with legislation. Our objective is to pay the right amount of tax and submit the correct information to the tax authorities at the right time.
- Fairness to all of our stakeholders. Whilst CVS pays all taxes that are required, we have a duty to our shareholders and to our customers to pay only the tax that is required so that our shareholders receive a fair return and customers pay a fair price for the services that we perform.
CVS’s tax risk profile and management of tax risk
The tax risk profile of CVS is considered relatively low for following reasons:
- The CVS Group is predominantly UK based with only a small proportion of our business in the Netherlands. Therefore, complex international tax structuring and significant intra group cross border transactions are not relevant to CVS.
- Substantially all sales are subject to standard rates of Value Added Tax.
- The CVS Group is profitable and has no material historical tax losses.
- The CVS group has no complex borrowing arrangements and therefore is not exposed to the tax risks associated with complex financing structures.
The Board and the Group Internal Audit Manager, who reports to the Chairman of the Audit Committee, are responsible for overseeing the Group risk management process. This process incorporates tax risks. The Internal Audit Manager oversees a review of all business risks with relevant divisions and staff at least twice each year. Where risks are higher than deemed acceptable, mitigating actions are put in place to reduce the risk. This process, and its results, are reported to and reviewed by the Audit Committee.
Key roles, responsibilities and oversight
Ultimately responsibility for the tax strategy rests with the Board. It is reviewed annually by the Group’s Audit Committee.
Tax planning and compliance is the responsibility of the finance function of CVS and the Group Finance Director (who is a Board member) is responsible for oversight of Group’s tax strategy and policies.
Tax strategy and policy issues are assessed on a case by case basis by the Group Finance Director in accordance with this strategy.
Day-to-day tax compliance matters are delegated to the finance function. The finance function has a broad range of experience both within CVS and in other large organisations. The team includes a range of staff with professional qualifications appropriate to the roles that they perform.
Systems and controls in place to manage tax risk
The Group has a range of systems and controls in place to ensure that all financial transactions are accurately reported and the tax thereon is calculated correctly, including:
- As set out above, tax risks are monitored and appropriate mitigating actions put in place.
- Only suitably qualified staff within the CVS finance function take decisions regarding taxation.
- Accounting and payroll processing in the UK is centralised, ensuring that appropriate expertise is concentrated in one place and can oversee all transactions.
- CVS Group grows significantly by acquisition. Where accounting and payroll transactions for acquired businesses take a short while to be centralised these are overseen by the central CVS Group teams.
- Documented policies are in place and available on the Group’s intranet to help ensure that all staff are fully aware of the policies. These policies cover matters that might impact on taxation.
- All employment related payments are required to be made through the payroll.
- An internal audit function has been established to help ensure that underlying transactions are properly carried out and recorded in in the accounting records.
- The Audit Committee receives and reviews the status of tax compliance and the outcome of any reviews performed by HMRC.
- External advice is sought from the major accounting firms and legal practices as required.
CVS’s attitude to tax planning
The Group is committed to acting with honesty and integrity. The finance team who deal with tax planning and compliance are appropriately qualified professionals and the professional bodies to which they belong require a high standard of honesty and integrity.
The overriding requirement of CVS Group’s tax strategy and policy is to comply fully with tax law, both in the UK and overseas. The Group aims to make timely and accurate tax returns and payments. Within this context, we aim to be fair to our stakeholders, such as customers and shareholders, by minimising the Group’s tax liabilities in accordance with legislation. Whilst seeking to do so, we seek to make use of appropriate reliefs permitted by legislation.
The Group’s policy is not to take an aggressive interpretation of tax legislation or use artificial tax avoidance schemes. CVS Group does not perform tax planning where the main purpose is to gain a tax advantage.
To support us in ensuring that we have interpreted tax law correctly, we seek advice from large accounting firms, legal firms and tax counsel as appropriate. Equally to ensure that we take advantage of all tax opportunities which are open to us we work with professional advisors to understand changes in legislation.
The level of risk in relation to taxation that CVS is prepared to accept
CVS Group’s policy is to accept a low level of risk with regard to taxation, both in the UK and overseas. This is achieved by the policies set out above.
As in every organisation there is a cost to establishing and maintaining systems and control to ensure the accuracy of recording normal transactions. The Group’s systems are designed to ensure that the Board have confidence in the reasonable, but not absolute, accuracy of transactions.
Decisions on tax planning are taken at a senior level and agreed by the Group Finance Director. Individuals are not given delegated responsibility which would allow them to set their own level of risk which could be taken in tax planning.
It is CVS Group policy that the Board should be involved in making decisions where there are any doubts over how to apply the tax strategy to a specific set of circumstances.
CVS’s approach towards its dealings with HM Revenue & Customs
An important part of our tax strategy is the maintenance and development of a strong, proactive working relationship with HM Revenue & Customs (“HMRC”). It is CVS Group policy to be transparent with HMRC.