Partnership Tax Strategy
Last updated: 24 April 2020
Alignment with Corporate and Social Responsibility
Pinsent Masons is committed to acting responsibly, whilst being consistent with the letter of the law. We are transparent, fair and ethical across all our business activities and our tax strategy is aligned to and reflects this approach. Our commitment to behaving responsibly is at our core and it extends to everything we do, including our compliance with tax law and practice.
Compliance and Reporting principles
Compliance for us means submitting our tax returns by their due date and paying the right amount of tax in the right place at the right time. We disclose all relevant facts and circumstances to the tax authorities and claim reliefs and incentives where appropriate.
Tax planning principles
In structuring our business activities we take into account tax laws (as well as all other relevant matters) in all the countries in which we operate. We seek to claim appropriate reliefs and incentives (such as capital allowances) and to prevent double taxation (so that the same income is not taxed twice in different places). Any structuring that is undertaken is consistent with the commercial and economic substance of our business and takes into account the potential impact on our reputation and our strategy as a responsible business. We do not put in place any arrangements that are contrived or artificial.
We aim for certainty on the tax positions we adopt but where tax law is unclear or subject to interpretation, written advice or confirmation is sought as appropriate to ensure that our position is a reasonable one to take.
Governance and risk management principles
Given the scale of our business and volume of tax obligations, risks will inevitably arise from time to time in relation to the interpretation of complex tax laws and the nature of our compliance arrangements. We actively seek to identify, evaluate, monitor and manage these risks to ensure they remain in line with our objectives. Where there is significant uncertainty or complexity in relation to a risk, external advice may be sought, particularly in relation to our international tax obligations.
The governance of our arrangements in relation to United Kingdom ("UK") taxation is under the day to day management of our in-house tax team reporting to the Director of Finance. These arrangements are approved by and under the control of our Board (of which the Director of Finance is a member).
We maintain a risk register which includes tax risks and which is reviewed by our auditors as part of the annual work undertaken.
Relationships with tax authorities
In managing our own tax affairs, we engage with HMRC with honesty, integrity, respect and fairness and in a spirit of co-operative compliance. Wherever possible, we do so on a real time basis, to minimise tax risk. Significant compliance issues, uncertainties and/or irregularities are raised with HMRC where appropriate. We promptly provide full, accurate and helpful answers to HMRC queries.
In doing so, whilst we will not take positions on our own tax matters that may create reputational risk or jeopardise our good standing with taxing authorities, we are however prepared to litigate where we disagree with a ruling or decision of a tax authority, having always first sought to resolve any disputed matters through active and transparent discussion.
Pinsent Masons was formally assessed as a Low Risk business by HMRC as part of their regular triennial risk review process in both 2014 and 2017.
UK Tax Contribution
We make a significant contribution to the UK Exchequer through the taxes paid by the members of our LLPs (LLPs do not themselves pay tax as UK tax rules look through a partnership to its members) and the business. In the past year this is estimated to be £81.7m (Previous year £79.7m), broken down as follows:
Taxes Paid by Pinsent Masons in the UK (GBP)
In addition, we have collected taxes on behalf of the UK Exchequer of £83.4m (Previous year £77.4m), broken down as follows:
Taxes Collected by Pinsent Masons on Behalf of Others (GBP)
Pinsent Masons International LLP regards this strategy as complying with its duty under paragraphs 16 and 25 of Schedule 19 Finance Act 2016. This policy covers our approach to arranging our UK tax affairs. It applies to Pinsent Masons International LLP and all UK affiliated entities for the financial year ending 30 April 2020 and for all subsequent years until superseded.