We regard our tax strategy to be compliant with Schedule 19 Finance Act 2016 in terms of content and meeting our responsibility to publish our strategy.
This strategy covers the companies listed below and applies for the relevant period, 1 January 2017 to 31 December 2017:
Heron Food Group Limited
Heron Foods Limited
Cooltrader Limited (dormant)
Heron Properties (Hull) Limited (dormant)
Our business relies upon our reputation with the general public, as they form our customer base, and our suppliers, employees and bankers, with whom we need to maintain a good relationship. It is therefore very important that we both meet and are seen to be meeting our responsibilities to comply with tax legislation and to pay the right amount of tax by the appropriate date.
It is important to us that we are compliant with current tax legislation. Our accounting and payroll staff are trained and experienced in calculating the taxes that they deal with on a day to day basis. We have procedures in place and use software that includes checks and balances to ensure that calculations are carried out correctly. There is a detailed checking procedure in place and oversight in respect of all taxes is provided by the Financial Director and Financial Controller.
For more complex calculations such as stamp duties and corporation tax, we use professional advisors. For other taxes, all our staff are encouraged to and do seek professional advice where they are unsure of the tax treatment of an item or transaction. We also use professional advisors to periodically carry out reviews of our tax reporting systems.
The Financial Director is directly involved with the day to day running of the group’s tax compliance and reports back to the Board on this.
The financial performance measures used by the group are sales, profit margins and EBITDA. As these are all pre-tax measures there is no pressure on the group to seek to mitigate taxes. The group’s policy is that it will aim to maximise its profits before tax and then it will calculate and pay the correct amount of tax due on those profits.
We do not want the negative publicity that non-compliance would attract and therefore we do not undertake aggressive tax planning or utilise any tax schemes, the sole purpose for which would be the obtaining of a tax advantage.
To this end, all investment decisions are made without the tax impact forming part of the considerations. So, for example, the return on capital on a new shop is calculated without considering whether any tax relief will be obtained on the building or its fittings.
Our attitude towards tax risk is to seek to minimise this as much as possible as this minimises our reputational risk. We do this by ensuring that we are compliant with tax legislation and tax is paid by the appropriate due date. We believe that if we were to pay late or to not submit our returns on time HMRC would view us as a higher risk business.
Our philosophy is that we are in business to make profits, the tax that is due on those profits and other business taxes is set out by the tax legislation and it is our corporate responsibility to pay those taxes without seeking any contrived way to reduce the amount payable.
We are currently assessed by HMRC as having a low level of tax risk and that is a risk rating we wish to maintain.
As a large group, HMRC has appointed a Customer Relationship Manager (CRM) to look after our affairs. We aim for an open and honest relationship with our CRM. We have appointed tax advisers who are also in contact with our CRM and assist us in managing this relationship. Several meetings with our CRM have already taken place.
The CRM is notified when any changes are proposed to the business or its systems that may have a tax impact. This allows us to discuss and agree any changes upfront and ensure that we get the tax treatment correct. If any historic tax issues are identified, the CRM is notified as a matter of course and we work with them to find a solution.