Tax Strategy

G4S tax strategy and approach to taxation

G4s, Tax, Strategy

G4S’ Approach to Taxation

G4S is the leading global integrated security company, specialising in the provision of security products, services and solutions. G4S operates in over 90 countries with approximately 570,000 employees who deliver services that create a safe and better environment in which millions of people live and work.

As a high-profile provider of public services, the group consider it is important that we increase the public’s understanding of tax matters and their trust in larger corporate groups by being transparent about our tax affairs and cooperating with the tax authorities.

Our approach to Taxation was previously published in the 2015 and 2016 Integrated Reports and Accounts. In 2017 to fulfil the new requirements under UK lawii , and to support transparency of our approach to taxation, we refreshed our tax policy to set out:

  • Our approach to governance, risk management and compliance
  • Our approach to tax planning
  • Our approach towards dealings with Tax Authorities
  • The level of tax risk we are prepared to accept
  • The amount of tax we are paying

We review this on an annual basis, and this version has been updated for 2018.

By responsibly managing the group’s tax affairs in line with our tax policy, the group is also adhering fully to the Confederation of British Industry’s seven tax principles iii .

i around 570,000 employees, as disclosed on page 12 of the Integrated Report and Accounts for 2017
ii Our Tax Policy complies with the UK legislative requirements under paragraph 16(2) Schedule 19 Finance Act 2016 for the year ended 31 December 2018.
iii http://www.cbi.org.uk/cbi-prod/assets/File/pdf/statement-of-tax-principles.pdf as published on 7 May 2013

 

Governance, Risk Management and Compliance

The group operates in a large number of countries and is typically subject to tax in those jurisdictions. The group employs an in-house team of tax professionals who interface with the regional and country business and finance teams to manage the group’s tax risks in a controlled and proactive manner.

We endeavour to fully involve our tax team in all significant business developments so that we can fully assess any potential tax consequences of our actions in advance.

The complex international tax environment means that there is always an element of tax risk and uncertainty inherent with the group’s operations. In common with other multinational groups, G4S’ most significant source of uncertainty arises where two or more governments adopt different interpretations in relation to pricing inter-company cross border transactions, i.e. transfer pricing. 

We have established and maintain appropriate policies and compliance processes to ensure the integrity of our tax returns, and timely and accurate tax payments in all countries in which we operate. 

Group companies are routinely subject to tax audits which can take a considerable period of time to conclude. As and when appropriate, the group obtains advice from external professional firms to support its positions.

Tax Planning

We manage our tax affairs responsibly and transparently. We only undertake tax planning which aligns with our commercial and economic activity.

We utilise government-sponsored tax incentives, reliefs and exemptions in line with the tax legislation. In the UK this includes the Patent Box, Research and development allowances and group relief.

In international matters, we follow the terms of the relevant Double Tax Treaties and OECD guidelines in dealing with such issues as transfer pricing and establishing tax presence.

Further, we have established appropriate policies and compliance processes to ensure integrity of tax filings and timely and accurate tax payments in all countries in which we operate. We expect employees to comply with all applicable policies and compliance processes and to ensure they do not involve any G4S entity in tax evasion. In addition, employees must not knowingly facilitate the evasion of any tax by any non-G4S entity such as a customer, supplier or contractor.

Dealings with Tax Authorities

We actively seek open dialogue with Her Majesty’s Revenue and Customs (HMRC) and other tax authorities, in pursuit of a professional relationship of constructive compliance, with the aim of achieving early agreement on disputed items and obtaining certainty where possible.
 
We provide all relevant information when requested to do so by HMRC or other tax authorities. If we discover errors in tax returns or correspondence with tax authorities, we disclose and correct them promptly.
 
We take an active role in contributing to the UK and international tax policy-making process, where relevant, including taking part in formal and informal consultations.
 

Level of tax risk we are prepared to accept

The group’s approach to tax risk is integrated within our broader business risk management and compliance framework.

G4S’ processes, policies and governance operate to ensure compliance with tax laws and regulations in the territories in which we operated and are designed to identify and mitigate material tax risks. In the event that applicable tax laws and regulations are subject to interpretation, we seek appropriate assurance regarding the position taken (e.g. in relation to transfer pricing matters through advance pricing agreements).

In 2017, in the UK G4S paid the following taxes:

Tax  £million 
Taxes borne
Corporation Tax 2
Production taxes such as irrecoverable VAT, fuel duty, IPT, import duties
16
Business rates  9
Employer National Insurance 67
Apprenticeship levy 3
Taxes collected
PAYE 93
Employee National Insurance 51
Net VAT on sales  174
Total 415

Approved by the G4S plc Board of Directors and published in December 2018

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