Watts UK Group Tax Strategy
The publication of this strategy statement is intended to satisfy the statutory obligation under Schedule 19 of the Finance Act 2016.
This strategy applies to all Watts entities organized in the UK (collectively the “Watts UK Group”).
Our Approach to Tax Risk Management and Governance
The Watts UK Group is committed to complying with the tax laws and practices in the UK, including the observance of all applicable laws, rules, regulations, and reporting and disclosure requirements in line with our Code of Conduct. Our Code of Conduct is the centerpiece of a global set of standards for how we operate, and which is supported by our Board of Directors and executive officers, and is intended to guide all employees through the many workplace interactions they encounter each and every day. In addition, Watts maintains internal control policies and procedures to support its tax control framework. The framework, along with our other financial and operational systems, is subject to rolling independent review by our internal and external audit teams.
While the board, its committees, and the Watts executive team oversee risk management, the Watts UK Group local management team is charged with day-to-day management of the Watts UK Group. The Watts Tax Department (WTD) collaborates with the UK businesses to provide the advice and guidance necessary to ensure compliance with all relevant tax laws and practices in the UK, obtaining advice from professional tax advisors where necessary.
Our Tax Risks
The Watts UK Group manages its tax risk in a similar way to any area of operational risk encountered across the Group. Risk management is embedded into our culture and day to day operations. We understand the importance of tax in the wider context of business decisions and have processes in place to ensure that tax is considered as part of our decision making process. We proactively seek to identify, evaluate, manage and monitor our tax risks to ensure that they remain in line with the Company’s risk appetite.
We have relationships with professional tax advisors. Due to the subjective nature of certain tax rules, the complexity in relation to a tax risk, as well as the uncertainty in the application of a relevant tax law, advice from one of our external advisors may be sought to support the Group’s decision making process.
Our Attitude to Tax Planning
The Watts UK Group engages in appropriate tax planning that supports its business and reflects its commercial and economic activities. In structuring Watts’ commercial activities, we consider the tax laws of the UK as well as all countries in which we operate, with the view to maximizing value on a sustainable basis for our shareholders and stakeholders, while remaining compliant with all relevant laws.
As necessary, we consult with professional tax advisors to ensure that our tax technical interpretation is fully aligned with the relevant tax legislation.
Our Approach with Her Majesty’s Revenue & Customs (HMRC)
The Watts UK Group is committed to the principles of openness and transparency with HMRC. We have adopted a proactive approach to working collaboratively with HMRC. We seek to make fair, accurate and timely disclosures in our correspondence and tax compliance. We strive to resolve issues with HMRC in a timely manner, and where disagreements may arise, we look to resolve those issues through active and transparent discussion whenever possible.
On occasion, we may employ the services of professional tax advisors to assist us or act as our agent, and in certain cases liaise with HMRC on our behalf.