The Octopus Group Tax Strategy

Year ending 30 April 2021


Octopus Capital Limited and its subsidiaries ‘The Group’ regards the publication of this tax strategy as complying with its duty under paragraph 16(2) of Schedule 19 of the Finance Act 2016 to publish its Group tax strategy in the current financial year.

Taking each of the requirements of paragraph 16 (2) of Schedule 19 in turn: 

Tax risk management and governance

Tax risk is the risk that our tax reporting returns or liabilities are inaccurate or incomplete, potentially leading to under or over collection or payment of tax, exposing us to tax authority sanctions as well as potential damage to our reputation. We are subject to the following principal taxes:

  • corporation tax on the profits of our business;
  • employer social security contributions on employment costs; and
  • value added tax (or its equivalent) on relevant services.

We also facilitate the withholding and payment of income tax and social security contributions from employee remuneration and stamp duty from client trading activity.

We manage tax risk within our group wide risk management and governance framework. Our Board, by the way of our Audit and Risk Committee, is accountable for risk management and ensures that an effective risk management framework is in place, which encompasses tax risk. 

The Group’s tax risks and governance matters are also managed through use of reputable external advisors to provide tax compliance and advisory services.

Most of the tax compliance for the Group is outsourced to external advisors, who are responsible for preparation of tax reporting information, tax computations and filings and advising on tax payments where required.  Tax compliance is carried out internally by suitably qualified and trained finance personnel, who consult with external advisors periodically as necessary.   

External advisors are also engaged on all material transactions undertaken by the Group to ensure that tax impacts are understood and correctly accounted for.

Risk appetite

Our appetite for tax risk is low.  Our business model and operating structure is straightforward and not subject to significant judgement in the application of tax law.   We do not seek to artificially manipulate our business affairs in order to unreasonably minimize our tax liabilities and aim to pay the right amount of tax in accordance with the spirit of the law in all jurisdictions where we have economic substance.

The Group’s attitude to tax planning

While we will run our business in a cost effective manner in line with our obligations to our shareholders and clients, in terms of tax, we will only utilize legitimate tax reliefs for the purposes for which they were intended by our governmental tax authorities in the jurisdictions within which we operate.   We do not:

  • engage in aggressive tax planning; 
  • seek to structure transactions in an artificial manner whereby results are inconsistent with the underlying economic consequences; or
  • promote tax avoidance or condone abusive tax practices which would contravene our ethics and culture or the law.  

We believe in safeguarding our reputation and our relationships with clients, shareholders and tax authorities alike and we are not subject to undue shareholder influence.

We will seek external tax advice in certain situations, for example:

  • in respect of large, one off transactions such as business acquisitions or disposals, to ensure that we do not suffer any unforeseen or unreasonable tax outcomes;
  • in areas where we may have insufficient internal expertise; and
  • as a second opinion in cases where we believe there is uncertainty with respect to the application of tax law, although we may also approach HMRC directly, to seek clarity or obtain clearance.

Dealings with tax authorities

In line with the Group’s attitude to tax planning and appetite for tax risk, the Group will always seek to work with tax authorities (primarily Her Majesty’s Revenue and Customs) in a co-operative and transparent matter.

The Group will use advisors to correspond with tax authorities where those advisors have advised on the relevant matter.  In other cases, the Octopus Group will deal directly with the tax authority although we may seek external advice when doing so.

This tax strategy was approved by the Board of Octopus Capital Limited on 27 April 2018.