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This document is Virgin Active group’s UK tax strategy for the accounting period ended 31 December 2016, published in accordance with the requirements set out in Schedule 19 of Finance Act 2016. It was originally published on 31 October 2017.
The Board of Directors of Virgin Active International Investments Limited has ultimate oversight over tax for the Virgin Active group. This tax strategy was reviewed and approved by the Board. It will be periodically reviewed and any amendments will be approved by the Board.
This document applies to the UK and all the Virgin Active group entities tax resident in the UK.
Tax is important to Virgin Active:
• Virgin Active recognises that collecting and paying tax is an important contribution to the economy and society in which it operates.
• The Virgin brand is critical to its success, and the success of all the companies in the wider Virgin group. It is important to all of Virgin’s investors, customers, employees and other stakeholders that Virgin Active not only complies with the law, but is seen to be compliant.
• Tax is a cost of business. Virgin Active has an obligation to its investors, customers, employees and other stakeholders to take all reasonable steps to manage this, as it would with any other cost.
With this is mind, Virgin Active’s aim is to pay the right amount of tax, at the right time and in the right place.
To achieve this Virgin Active has adopted the following five overarching principles with respect to tax:
1. Operate in accordance with the relevant legislation and case law.
2. Submit all necessary tax returns and pay all taxes due on a timely and accurate basis.
3. Ensure that Virgin Active’s tax affairs are arranged in an efficient manner by making use of the concessions and reliefs to which it is legally entitled. However, Virgin Active will not use aggressive tax planning or enter into contrived tax avoidance schemes.
4. Develop and maintain an open, professional and courteous working relationship with HMRC and pro-actively raise issues with HMRC when relevant.
5. Develop and maintain good practices to put these principles into action in the Virgin Active business.
Tax is a complex and constantly evolving business issue. It is inevitable that risks will arise in relation to the interpretation and application of tax law to the Virgin Active business. Virgin Active’s approach is to identify, evaluate and monitor these risks and take action to resolve if necessary.
To do this Virgin Active employs an in-house tax manager and one of their key roles is to monitor tax risk, in particular the impacts of:
• Changes in legislation
• Changes in the Virgin Active business
• Transactions which have a significant tax impact
There is frequent and regular discussion of tax with the Virgin Active group’s Chief Financial Officer and the UK Finance Director. The Chief Financial Officer is a member of the Board of Directors, and where appropriate will raise tax issues to the Board.
The group maintains an enterprise risk register which is reviewed at the Board level and will include significant tax risks.
Where there is significant uncertainty or complexity external advice may be utilised, and advance clearance from HMRC may be sought.
Tax planning and appetite for risk
In the course of Virgin Active’s day to day business operations tax will be considered, along with other relevant factors, with a view to maximising the value of the business on a sustainable basis for Virgin Active’s investors, customers, employees and other stakeholders.
Where alternative options are available to achieve the same commercial result the most tax efficient approach, in compliance with the relevant legislation and case law, should be considered.
However, the as set out in the principles above, the primary objectives of Virgin Active are:
• paying the right amount of tax at right time
• not to use aggressive tax planning or enter into contrived tax avoidance schemes
• maintaining a good relationship with HMRC
Tax advice may be sought on material transactions or where there is significant complexity or uncertainty on the application of the tax law.
Virgin Active does not set a target effective tax rate, the effective tax rate will be the result of commercial factors arising in any given year.
Virgin Active does not have a prescribed level of tax risk, however, its appetite for tax risk is low and it does not pursue aggressive tax planning arrangements.
Dealings with HMRC
One of Virgin Active’s tax principles is to develop and maintain an open, professional and courteous working relationship with HMRC and pro-actively raise issues with HMRC when relevant.
To achieve this Virgin Active will:
• Avoid unnecessary time consuming disputes wherever possible
• Make fair, accurate and timely disclosure in returns and give full and meaningful answers to enquiries and other questions
• Respond to queries and provide information and documents regarding tax matters requested by HMRC in a timely manner
• Where there are differences of understanding and interpretation between ourselves and HMRC we will engage in proactive discussion to bring matters to as rapid a conclusion as possible