Financial year ended 31 December 2023
In accordance with Schedule 19, Finance Act 2016, Arnold Clark Automobiles Ltd and its subsidiary undertakings (“the Group”) sets out below its tax strategy. This document will be reviewed annually and updated as appropriate. For the purposes of the Group’s tax strategy, tax is defined as all forms of direct and indirect tax charges or levies, and applies to all UK entities within the Group.
Arnold Clark Automobiles Ltd is a UK automotive retail and after sales business with branches throughout the country. The Group pays a range of taxes including corporate income taxes, employment taxes, and stamp duty land tax. We also collect and pay employee taxes as well as indirect taxes such as VAT and excise duties.
The Group’s strategic aim is to pay the right amount of tax, at the right time, and to comply with tax legislation and reporting requirements in the UK. We consider the right amount of tax to be the amount calculated as payable according to legislation in force at that time and which results from a careful evaluation of the particular facts and circumstances.
The Group Finance Director is responsible for the Group’s tax strategy which is approved by the Main Board. The implementation and delivery of the strategy is supported by the Group tax and finance teams. The Group tax team is embedded within the Group finance team which enables tax to be involved in the decision making in all areas of the business. Given the complexity of tax legislation, the Group engages external tax advisers to provide an independent view on our tax compliance in all significant areas. Where the submission of information to the tax authorities is outsourced to a third-party, consideration is given to the capability of the third-party and all data will be checked prior to submission to the tax authorities.
Pillar Two legislation has been enacted in the UK and will come into effect from 1 January 2024. The Group is within the scope of the OECD Pillar Two model rules, but given the scale of our overseas operations, any potential exposure to the Group is expected to be insignificant.
The Group has a low tolerance to tax risk. The Group utilises available incentives and reliefs within the UK Tax legislation, such as capital allowances and research and development credits and takes specific external advice to ensure our compliance in these areas. The Group will not adopt fiscal structures or tax products which require formal notification to HM Revenue and Customs (“HMRC”) under the Disclosure of the Tax Avoidance Schemes (DOTAS) legislation.
To fulfil our commitment to pay the right amount of tax at the right time, and to comply with tax legislation and reporting requirements in the UK, we ensure that we have the effective procedures, processes and controls in place to minimise the risk of non-compliance. These processes and controls are tested on a regular basis. If errors or weaknesses are identified, the potential impact is assessed, and our processes amended. Tax implications are considered and any required adjustments would be made and disclosed to HMRC as appropriate.
The Group approaches all dealings with HMRC in an open and transparent way. We are committed to addressing any tax enquires or audits with HMRC promptly and resolving these in an open and constructive manner. All tax related returns are submitted on due dates and any information requests are responded to in a timely manner.