The below sets out the tax strategy for MHI Vestas Offshore Wind A/S and its UK subsidiary undertakings, MHI Vestas Offshore Wind UK Ltd. and MHI Vestas Offshore Wind Blades UK (“the UK Group”), and in making this strategy available the UK Group is fulfilling its responsibilities under Schedule 19 of the Finance Act 2016.
The tax strategy applies to all UK taxes applicable to the UK Group, and the document is owned by the Board of Directors of MHI Vestas Offshore Wind A/S (“the Board”). It will be reviewed annually, updated as appropriate and approved by the Board. The Board is responsible for setting and monitoring the strategy. The finance teams are accountable to the Board for the implementation of the tax strategy as well as the management of tax and related risks.
The UK Group’s tax strategy is based on our vision “to be a responsible leading player in the offshore wind industry and to be the most value adding partner through reliable wind power solutions” as well as our mission to “co-develop offshore wind as an economically viable and sustainable energy source to benefit future generations”.
The tax strategy reflects our status as a company which requires strong governance, consideration of our reputation, and delivering returns to our stakeholders. Our tax strategy reflects the regulated nature of our business, which requires further compliance with local laws, regulations and guidance.
How the UK Group manages its tax risks
The UK Group’s on-going approach to UK tax risk management and governance is based on the principles of reasonable care and materiality. The UK Group maintains on-going application of tax governance with internal controls in order to substantially reduce tax risk to an acceptable level. As part of this governance, the UK Group maintains a tax risk register and the materiality of each tax risk is assessed based on potential impact on the Group. The Finance management of the UK Group will supervise the process of handling this tax risk register – ensuring proper attention from MHI Vestas Group management.
The UK Group’s attitude to tax planning
The UK Group will not engage in artificial transactions with the sole purpose to reduce UK tax. However, the UK Group will consider undertaking a transaction in a way that gives rise to UK tax efficiencies providing this is aligned to the UK Group’s commercial objectives and complies with the associated UK tax legislation. The UK Group will not engage in tax efficiencies if the underlying commercial objectives do not support the position, or if the arrangements have negative impact upon the UK group’s reputation, brand, corporate- or social responsibilities, or future work relations with HM Revenue & Customs (“HMRC”). External advisors will be consulted if there are any questions regarding specific transactions, that might be considered unusual for the UK Group.
The UK Group and its tax risks
The UK Group’s strategic aim is to maintain its low UK tax risk. The UK Group seeks to achieve this aim through:
- submission of all UK tax returns on a timely basis, including sufficient details to enable HMRC to form an accurate view of the affairs of the UK Group filing the return with an adequate supporting audit trail and sign-off process;
- paying the appropriate amount of tax at the right time. Where this view may differ to the position taken by HMRC, the UK Group aims to be transparent about the filing position it has taken;
- maintaining tax accounting arrangements which are robust and accurate and comply with the Senior Accounting Officer (SAO) provisions in the UK
- employing the services of professional tax advisors to act as our agents, and, in a number of cases, they liaise with HMRC on behalf of the UK Group. This is seen by the Board as the best way to get the most out of the relationship with HMRC thus reducing our tax risk; and
- ensuring all tax filing positions are supported with appropriate documentary evidence.
Working with HMRC
The UK Group will comply with all relevant legal disclosure and approval requirements, and all information will be clearly presented to HMRC as appropriate. In case of new or unusual tax events the UK Group or their advisors will, in relevant cases, consult with HRMC.
Issue date: 25 March 2020 relating to financial year ending 31 March 2020.