Premium Credit Limited (PCL), the Group’s principal trading subsidiary, provides instalment finance solutions, supporting the purchase of insurance policies and other services to corporates and individuals in the UK and Ireland. Strong corporate governance is critical to maintaining stakeholders’ confidence and as such the Group is committed to complying with UK tax law and practice. For the Group, compliance means accurate payments of tax in line with the applicable laws and practices. It also involves disclosing relevant information to the tax authorities and where available claiming reliefs. Our overarching aim is to minimise any regulatory risk within our business, which includes taking a low risk approach to tax risk. We aim to ensure that our tax arrangements remain consistent with a low risk appetite, both in financial and reputational terms. We are committed to full compliance with our tax obligations.
Responsibility for the tax strategy, the supporting governance framework and management of tax risk ultimately sits with the UK Board and the Chief Financial Officer, and is overseen by the Audit Committee.
The key risks and controls for PCL in the UK are highlighted below:
Tax compliance and reporting risks: As with all businesses, PCL has the risk of submission of late or inaccurate returns and payments. In order to mitigate this risk, PCL have implemented robust internal controls and use external tax advisors to advise on or prepare the UK Corporation tax filings. The type pf taxes we pay are corporate income taxes, VAT, employment and other taxes.
Transaction risks: The risk of transactions carried out or actions taken without appropriate consideration of the potential tax consequences. A detailed risk assessment is undertaken for all material business changes (ie. business change, new products). As part of this assessment, tax risk is assessed by external tax advisors to ensure all tax risks are assessed.
Legislative change risk: Legislative tax changes pose risk to our business and to ensure this risk is mitigated, we receive regular updates from our tax advisors and attend industry seminars. Our tax advisors are then engaged where necessary.
PCL has a low risk appetite for all business risks, including tax. As such, PCL is committed to ensuring it complies with not only the letter of the law, but also the intention of parliament, whilst maintaining value for its shareholders. This is achieved through segregated responsibilities within the businesses for tax compliance, and liaising with a third party recognised tax expert.
PCL aims to be efficient with tax planning, including taking advantage of any government tax incentives, such as R&D Expense Credits, in order to maximise value on a sustainable basis for the Group and its shareholders. However, any structuring that is undertaken must have commercial and economic substance, and PCL does not put in place any arrangements that are contrived or artificial. Where planning is undertaken, we consult external tax advisors to ensure that the tax technical interpretation is fully aligned to our risk appetite.
In the spirit of cooperative compliance, PCL engage with HMRC in an open and transparent manner. We do not take positions on tax that may create reputational risk and seek to resolve any issues with HMRC through proactive discussion wherever possible.
