FirstRand UK Tax Strategy
FirstRand Ltd (FirstRand) is an integrated financial services group, providing a comprehensive range of products and services to the South African market and niche products in certain international markets. In the UK, FirstRand primarily provides financial services through its MotoNovo division, including car finance and similar loans.
This Tax Strategy applies to (FirstRand UK) which comprises FirstRand Bank Ltd (London Branch) and all UK entities within FirstRand, excluding Aldermore Group Plc and its subsidiaries (Aldermore Group) which have published a separate Tax Strategy (on their own website, see https://www.investors.aldermore.co.uk/about-us/corporate-governance/introduction/tax-strategy). References to (FirstRand UK) are therefore to all UK companies and UK permanent establishments within FirstRand (excluding Aldermore Group). This statement is intended to meet the requirements of Section 19(2) of Schedule 19 of the 2016 Finance Act to publish an external tax strategy.
FirstRand UK is guided by the same principles as those which apply to FirstRand and follows the Group’s Global Tax Strategy.
FirstRand Global Tax Strategy
FirstRand’s stated long-term strategic objective is to deliver superior and sustainable economic returns to shareholders within acceptable levels of volatility and maintain balance sheet strength.
Consistent with the FirstRand Global Tax Strategy, the UK tax strategy is aligned with the above principles. In achieving the business philosophy, a variety of local and international taxes arise.
FirstRand is committed to complying with all tax laws and practice in a responsible manner.
FirstRand’s Global Tax Strategy commits to two values:
- being responsible; and
- being accountable.
FirstRand acknowledges that to live these values successfully, it is imperative that FirstRand exhibits integrity in everything that it does.
Risk Management and Governance Arrangements
This Tax Strategy is approved and owned by the FirstRand UK Executive Committee. The Executive Committee is responsible for the management and monitoring of tax risks with whom ultimately the responsibility for FirstRand UK’s business tax strategies and outcomes lies. Tax risks, as well as improvements to the compliance processes, are reported periodically to the FirstRand UK Audit, Risk and Compliance Committee (ARC).
FirstRand UK has implemented a Risk Management Framework (RMF) which refers to the process of identifying, managing, monitoring and reporting the risks to which FirstRand UK is exposed. The RMF is supported by policies, processes and procedures. These combine to ensure that risks are managed in a manner which is appropriate to the size and nature of the group’s operations.
Attitude to Tax Planning and Level of Risk
FirstRand UK does not enter into abusive tax planning arrangements. Our low risk strategy is consistent with our adoption of HM Revenue and Custom’s Code of Taxation for Banks (the Code) and any tax planning is, and will be done, in accordance with the Code.
We engage in efficient tax planning that supports our business and reflects commercial and economic activity. We adhere to the tax laws in all of the jurisdictions in which FirstRand operates and, in so doing, we seek to minimise the risk of uncertainty or disputes.
We conduct transactions between the FirstRand Group companies on an arm’s-length basis and in accordance with the current OECD (Organisation for Economic Co-Operation and Development) principles. Where tax incentives or exemptions exist, we seek to apply them responsibly in the manner intended by governments and tax authorities. We establish entities in jurisdictions suitable to hold our offshore operations, giving consideration to our business activities and the prevailing regulatory environments in those offshore jurisdictions.
The broad range of tax obligations and the complexity of tax laws with which we are required to comply, give rise to occasional uncertainty in our tax liabilities. Tax risk is defined as non-compliance with these obligations, including inaccurate or late reporting which could lead to penalties, additional tax charges and reputational damage. Where there is uncertainty or significant complexity, external tax advice is sought, as deemed appropriate.
Relationship with HM Revenue and Customs (HMRC) and other tax authorities
FirstRand UK intends to have an open, honest and constructive relationship with HMRC. FirstRand UK is committed to the principle of openness and transparency in an effort to build trust with the tax authorities.
FirstRand UK aims to make full, accurate and timely disclosures in its tax returns for all UK taxes. If unintended errors arise, these will be corrected as soon as practicable after identification.