We are committed to ensuring that the Group is in compliance with applicable tax laws, rules and regulations in all of the jurisdictions where it conducts its business activities. Tax Strategy
Our overall Group policy is one which requires the highest standards of openness, honesty and accountability.
Reflecting this to tax, we are committed to ensuring that the Group is in compliance with applicable tax laws, rules and regulations in all of the jurisdictions where it conducts its business activities.
We understand that collecting and paying tax is an important contribution to the economies and societies in which we conduct our business. As a consequence, fundamental to our tax strategy is to pay the appropriate amount of tax in countries in which we operate.
Managing Tax Risk
We control and manage tax risk and Serco’s reputation through policies, communication and process.
The Group’s Tax Strategy is approved by the Board, and the tax process forms part of the Serco Management System (SMS), the Group’s management framework that describes how we do business. The system defines the rules which govern the way we operate; deliver our strategy and the way we behave. On international tax matters, as well as local law, we follow Organisation for Economic Co-operations and Development (OECD) guidelines and the relevant double tax treaties in areas such as transfer pricing and establishing taxable presence.
Our tax affairs are managed by a team of suitably qualified tax professionals, supported, where appropriate by external advisors. These tax professionals must be involved in the planning, implementation and documentation for;
- restructuring; and
- bidding for new/existing contracts;
This enables us to review and consider the associated tax implications under local law as well as the tax accounting impact of transactions on a pro-active and real-time basis. The Chief Financial Officer of each division confirms twice yearly that they follow this process.
Attitude to tax planning & tax risks
Transactions and structuring within the Group are driven purely by commercial considerations. Serco does not seek to avoid tax using artificial arrangements or tax havens. We do not undertake transactions that we would not fully disclose to the relevant tax authorities.
In making commercial decisions, we take tax into account in the same way as any other cost. We seek to manage the tax cost of doing business efficiently, including cash tax and accounting charges, whilst respecting the spirit and letter of applicable law. We utilise tax incentives to the extent intended by government.
We will continue to become more transparent in relation to tax through reporting of tax costs. In this context we have published our Total Tax Contribution within our Annual Report and Accounts since 2016. This provides information of the types of taxes that we pay in the regions in which we operate.
The Group will not undertake aggressive tax planning, reflecting our low risk appetite in terms of acceptable tax risk.
Working with Tax Authorities
In all our interactions with Tax Authorities, we operate with integrity, trust and mutual respect.
We foster a strong, open relationship with Tax Authorities. The application of this principle is tailored to each territory’s style of engagement across all the countries in which we do business.
Within this framework, each legal entity will file timely, complete and accurate tax returns to the relevant authority. Tax liabilities due and payable will be settled by the statutory deadlines. To facilitate this, finance employees commit to ensuring they have understood and are fully aware of critical filing and payment dates under local law.
In the UK specifically, we seek to work positively, pro-actively and openly with HMRC.
Serco consider this publication as complying with its duty under paragraph 16(2) and paragraph 22(2) schedule 19 Finance Act 2016 in respect of the 2023 financial year.