At Legal & General it is important to us that the right amount of tax is paid at the right time in the right place. We understand that we have a corporate responsibility and that the taxes that we pay is part of our contribution to society. We have been leaders in promoting tax transparency and building trust with stakeholders.
Tax strategy and approach
We aim for our tax affairs to be transparent and sustainable in the long term. Our tax strategy supports our Group strategy and the way we do business. It is clear about what we will and will not do.
- Meet all legal requirements; make all appropriate returns and payments
- Always consider the Group’s reputation, brand, corporate and social responsibilities
- Consider tax as part of every major business decision
- Discuss in real-time our interpretation of the law with HMRC
- Operate appropriate tax risk governance processes, including Board oversight
- Contribute to the development of UK and international tax policy and legislation where appropriate
- Not undertake transactions whose sole purpose is to create an abusive tax result or which are outside of the Group's risk appetite or are not in line with our Group Code of Ethics
Tax risk management and governance
With the tax landscape constantly changing, the Group’s tax affairs and tax risk management procedures are regularly reviewed to ensure that processes and measures are up-to-date so that we are able to identify, assess, manage and mitigate tax risk as well as being aligned with the Group’s business strategy and governance framework. The key risks that we face and how we manage these risks can be found online in our Group Tax Supplement.
Responsibility for the tax strategy, policies and management of tax risk ultimately rests with the Group Chief Financial Officer, with day to day responsibility for the operation of the tax function resting with the Chief Tax Officer and Group tax teams.
Customers, staff and society
Our customers, employees and society are at the heart of what we do and how we do things. We also engage with NGOs to talk about their tax responsibility agenda as well as our own tax position and our approach to tax in our role as a significant investor in other companies.
Go to our CSR report for further detail on how we help broader society with housing, pensions, savings , health, total tax contribution and other issues.
Tax compliance has become increasingly complex but we continually assess how we meet our global tax obligations. Go to our Group Tax supplement, Tax matters page and tax notes in the 2015 annual report and accounts for further detail about our tax affairs at Legal & General.
Policyholders, employees, technology and resource
We have embraced developments in digital technology and we have a TaxFacts app to help raise tax awareness for our employees and policyholders. The app is packed with useful information, including key dates, tax tips, calculators and a whole host of other features to tailor to individual circumstances. Click here to access the app http://www.legalandgeneral.com/advisercentre/campaigns/taxfacts/
We manage our tax affairs in a way that is sustainable and responsible to deliver returns and value for our shareholders.
Regulators and tax authority approach
As many of our businesses are regulated by external bodies we have to ensure that we are compliant from a regulatory perspective and we provide support to our colleagues across the business to do this. All of our businesses interact with HMRC and overseas tax authorities and we seek to have an open and transparent approach with them. Where tax authorities, such as HMRC operate a cooperate compliance approach with their customers, we seek to build good relationships with our Customer Relationship Manager (CRM) and their teams by engaging in real time discussions about our business and tax affairs. Where tax authorities take a different approach we seek to respond to their queries in a timely and appropriate manner.
Legal & General's total tax contribution to society for 2015 was £947m (2014: £794m). The majority of our taxes borne and collected arise in the UK of £813m (2014: £653m).
For more information about the taxes borne and collected by jurisdiction and by type of tax please click here.
Economic environment, the government and changes in tax legislation
In recent years the economic environment has been challenging and there has been significant focus in the media and pressures on governments' across the world to raise public revenues and tackle tax avoidance. We have seen governments' working with the OECD on new proposals including Financial Transactions Tax (FTT), Common Reporting Standards, (CRS) and the Base Erosion Profit Shifting (BEPS) project. Consequently there continues to be significant increase in changes to tax legislation which creates risk and uncertainty. However, we seek to manage this by either engaging directly with HMRC, HMT and others as appropriate or via trade bodies to manage the impact on our customers and our businesses from unintended consequences of any legislation changes.
The UK Government has recently introduced legislative requirements for all large businesses to publish an annual tax strategy which is approved by the Board. At Legal & General we already publish our tax strategy online in our Group Tax supplement but we shall be assessing the details of the requirements and will publish any additional information to ensure that we are meeting the new requirements as appropriate.