Spectris manages its tax affairs in accordance with the following objectives:
- Ensuring compliance with all relevant tax law in all jurisdictions in which the Group operates.
- Supporting the business in achieving its strategic objectives, whilst managing the associated tax costs in a manner that is consistent with the Group’s attitude to commercial risk.
- Seeking to maintain a sustainable and predictable P&L and cash tax rate.
- Ensuring that all communication with tax authorities is conducted in a professional and transparent manner.
The tax strategy supports the Group’s strategic objectives and applies equally to UK and to non-UK taxes and to all forms of tax including corporate income and indirect taxes as well as taxes associated with employees.
Risk management & governance
The Spectris tax strategy is reviewed on an annual basis by the Audit and Risk Committee, who receive regular updates on tax matters from the Chief Financial Officer and the Spectris Group Tax department.
Spectris operates a formal tax governance framework together with a set of clear tax policies and accountabilities. Together these determine the level of sign off required for transactions or operational Attitude to tax planning Acceptable levels of tax risk Dealings with tax authorities developments which could create material tax risk. Adherence to these policies is monitored through both self-assessment and regular risk reviews.
We recognise that the field of taxation is complex and constantly evolving and we actively monitor local and international developments and participate in consultation on future tax law change where we believe that it is in the Group’s best interests to do so.
In line with our core value of being true, Spectris is committed to maintaining effective procedures for the prevention of the facilitation of tax evasion by any party who acts for or on behalf of the Group, in accordance with applicable law.
Attitude to tax planning
We seek to responsibly manage our tax liabilities in accordance with tax legislation (such as making use of tax incentives for research and development and the utilisation of intellectual property) where the Group considers that such an approach is consistent with the Spectris values.
From time to time Spectris may establish entities in certain jurisdictions in order to hold and finance the Group’s overseas investments, giving consideration to our business activities and to the legal and economic environment in each territory. However, we will not put in place business structures that lack genuine substance and we will not operate in tax havens without a commercial purpose.
We are committed to ensuring that all transfers of goods and services between companies in the Group are conducted on an arm’s length basis in line with OECD guidelines and transfer pricing legislation and reflect the commercial nature of the individual transactions.
Acceptable levels of tax risk
Spectris recognises that tax laws are complex and may be subject to different interpretation. As a consequence, tax positions may be reviewed and challenged by revenue authorities from time to time. We seek to mitigate this risk by taking appropriate professional advice and by fostering good working relationships with tax authorities.
The Group does not employ a formulaic prescription of acceptable tax risk but considers various factors including reputational, financial and operational risks, as well as any potential impact on our relationship with any tax authorities, when determining its approach to tax matters.
Dealings with tax authorities
In our approach to dealing with tax authorities (including HMRC):
- We act in a professional and courteous manner at all times;
- We seek an open and transparent relationship based on trust;
- We aim to respond to all enquiries in a timely fashion; and
- We seek to resolve any disagreements amicably by discussion wherever possible.
Where there is material risk or uncertainty and the relevant tax authorities offer the possibility of early engagement then we will engage in dialogue on a real-time or pre-filing basis where it is practical to do so. In the UK we will engage in such discussions with HMRC where we believe that this is consistent with the Framework on Co-Operative Compliance.