Tax Strategy
Tax strategy
This document sets out the tax strategy for Smart Metering Systems Plc and its subsidiaries (herein referred to as “SMS” or “the Group”) as required by Paragraph 16(2), Schedule 19 of Finance Act 2016. The document is effective for the year ending 31 December 2023 and will be periodically reviewed and updated.
Set out below is the Group’s policy and approach to conducting its tax affairs and dealing with tax risk, ensuring that the Group complies with all relevant tax laws wherever it does business and that it pays all taxes that it is legally required to pay as and when they fall due. The strategy applies to UK taxation, including corporation tax, indirect taxes (including customs and excise duties) and employment taxes which are payable and reportable to HM Revenue & Customs (HMRC).
Management of tax risks
The Board of Directors are responsible for the overall governance of the business supported by the Senior Leadership Team. The Group aims to ensure that it meets its commercial objectives, whilst ensuring it is compliant with its financial and taxation obligations.
The Group has an experienced finance team, several of whom hold professional accounting qualifications. Day to day responsibility for the Group’s tax governance therefore sits with highly qualified professionals. Under the management of the Chief Financial Officer and, with appropriate support from external advisors, the finance team works with the business to ensure that;
- The strategy is adopted and followed consistently across the Group, with clear lines of responsibility and accountability;
- There is alignment of the strategy with the Group’s overall approach to corporate governance and risk management; and
- The Group pays the correct amount of tax required of it as determined by law.
The Group considers that it has sufficient controls and processes in place to meet the Group’s tax strategy.
Attitude to tax planning
The Group’s attitude to tax planning is aligned with its core values, and approach to business and ways of working. The Group does not participate in any tax planning arrangements that are not commercially driven, as all business decisions are driven by commercial factors. The Group will utilise tax incentives and reliefs in alignment with its commercial aims and will ensure that the use of these is in compliance with both the letter and the spirit of tax laws.
The finance team work closely and collaboratively with trusted professional tax advisors and consult with them on a regular basis for support on a wide range of tax compliance and consulting matters, as well as on cases:
- that are deemed complex or material to the Group,
- where there is a significant degree of tax uncertainty,
- where tax guidance is unclear, or
- where there is insufficient expertise or knowledge within the team to adequately assess the tax risks and consequences of transactions under consideration.
The level of risk the Group is prepared to accept for UK taxation
The Group has a low-risk appetite and a low tolerance for tax risk and engages with external tax advisors in real time to identify and mitigate potential tax risks associated with commercial transactions. Transactions are based on commercial values with the intent to comply with all relevant laws including applicable tax laws.
Working with HMRC
The Group strives to ensure that engagement with HMRC is professional, transparent and proactive across all relevant taxes and duties and ensures that their statutory and legislative tax requirements are met on a timely basis. Where issues do arise, the Group seeks to resolve these through agreement with HMRC in a proactive, collaborative and timely manner. Where there is uncertainty in the Group’s tax position, the Group will seek support from external advisors to support with such matters.
This tax strategy was approved by the Board of Directors of Smart Metering Systems Plc on 5th December 2023.