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Tax strategy

Tax strategy - Year ended 31 December 2021

This document is the group tax strategy for Arrow Global Group Limited and all subsidiaries in respect of the financial year ending 31 December 2021.

On March 31, 2021, Arrow Global Group plc announced the Board’s agreement to the terms and conditions of a recommended all cash offer of 307.5 pence for each ordinary share of AGG by Bidco, a newly formed company owned by certain of the investment funds managed by TDR Capital. Following shareholder approval on 21 May 2021, with 93.79% of shareholders voting in favour of the transaction, receipt of the final antitrust and regulatory clearances on 29 September 2021 and the High Court sanctioning the 240 Scheme at the sanction hearing held on 7 October 2021, the Acquisition closed on 11 October 2021. Arrow Global Group plc has been de-listed and the ultimate UK parent is now Sherwood Topco Limited.

The Board consider that for 2021 it is still appropriate that the tax strategy is published by Arrow Global Group Limited (formerly plc).

This tax strategy was approved by the Board on 20 December 2021 and is published in accordance with its duty under Para 19(2) of Schedule 19 Finance Act 2016.

The Group aims to manage its tax affairs in a responsible and transparent manner, to comply with relevant legislation and minimise risk whilst ensuring efficient utilisation of legitimate reliefs and incentives. This objective is aligned to the broader vision and values of the Group.

Risk managment and governance

The Board is responsible for oversight of tax and the associated maintenance of a tax control framework. The Board exercises this duty by:

  • Implementing and maintaining a clear tax policy
  • Integrating tax into the broader governance framework of the business (e.g. Audit and Risk Committees)
  • Maintaining active communication structures with responsible management
  • Reviewing and challenging areas of material uncertainty or judgement

The Group CFO is the Executive with responsibility for the management of all taxes, supported from an operational perspective by the Group Head of Tax, and domestic and overseas finance teams. This involves management of the Group’s on-going tax compliance responsibilities, execution of the tax policy and ensuring that appropriate tax resources, processes and systems are in place.

The principles of the Group’s approach to tax governance and risk management is summarised below:

Stakeholders / Responsibility

Area of Responsibility

Governance and Risk Management approach

Investors, Lenders, Customers, Employees, Tax Authorities, General Public

Tax Reporting

Effective and consistent reporting of taxes, including UK tax strategy, financial reporting and other public disclosure

Board, CFO, Audit Committee, Risk

Tax Policy and Governance

Tax Policy, Tax Committee, protocols for key decision-making, monitoring existing risk profile and appetite for new risk

Heads of Divisional Finance, Group Tax, HR, Central Finance

Tax Risk Management

Control framework for existing tax risks, process for identifying and reporting new risks

Group Tax, HR, Finance Teams

Tax Management

People, processes and systems to support effective business advice and compliance

Internal Audit

Tax Assurance

Objective Assessment of the effectiveness of design and operation of tax controls

Tax policy

The tax policy ensures robust communication of tax governance procedures covering relevant tax liabilities with clear guidance on control framework standards and responsibilities. The policy covers the following key areas:

  • A clear governance structure;
  • Definition of tax risk factors, including reputational, commercial, technical, financial and operational risk;
  • Schedule of tax control responsibilities to ensure effective management of taxes across the Group;
  • Tax risk register to ensure risks are monitored and communicated effectively; and
  • Guidance on the use of advisors, processes, people and systems, reporting and relationships with tax authorities.

Tax planning and acceptable levels of risk

The Group balances its responsibility to pay all taxes which it is required to pay, safeguarding its reputation as a responsible taxpayer, whilst recognising an obligation to protect shareholder value by controlling and managing the Group’s tax affairs in an efficient manner.

The Group will not seek tax efficiencies if the underlying commercial objectives do not support the tax position, or if any planning is contrary to anti-abuse laws. The Group is mindful of the impact of its tax affairs on its reputation and its future working relationship with HMRC.

The Group will not undertake planning that is contrived or artificial where the sole purpose is to reduce UK tax, but where appropriate, will structure commercial transactions in a tax efficient manner as permitted by law.

Advice is generally sought from advisors to provide support in the assessment of opportunities, consequences and risk and to provide guidance in the decision-making process.

Approach to dealings with HMRC

HMRC has not appointed a Customer Compliance Manager (CCM) to the Group nor initiated a business risk review.  However, the Group aims to resolve any disputed matters through active and transparent discussion, conducted in a collaborative, courteous and timely manner. In the unlikely event that there are any unintentional filing errors, these are fully disclosed to HMRC as soon as they are known.