Northumbrian Water Group Limited (‘NWGL’) is a company registered in England and Wales. Its principal subsidiary company – Northumbrian Water Limited – provides water and wastewater services in the north-east and south-east of England under a licence granted by Ofwat.
NWGL and its associated UK entities listed below are required by law to ensure their tax strategy is available to the public free of charge on the internet.
- NWGL and its subsidiaries
- Northumbrian Services Limited (‘NSL’) and its subsidiaries
- CKI UK Co 6 Limited (‘CKI 6’)
- CKI UK Co 5 Limited (‘CKI 5’)
Note: CKI 6 and CKI 5 are UK-based shareholders in NWGL and NSL
CKI5, CKI6, and NSL do not have their own website. As the Group’s tax affairs are managed as a single unit, the publication of a tax strategy for those companies is via this website, as permitted by HM Revenue and Customs ('HMRC').
All the above entities (for this purpose, the 'Group’) follow the Tax Strategy set out below, the publication of which complies with the requirements of paragraphs 16(2) and 19(2) of Schedule 19 to Finance Act 2016 for the financial year ending 31 March 2024 (and, in the case of CKI6 and CKI 5, the financial year ending on 31 December 2024).
Aim
The Group is committed to fully complying with all the statutory tax obligations that are imposed on its individual members or on the Group as a whole, including the provision of tax returns, the payment and recovery of taxes at the right time, and the provision of all relevant information to HMRC to support the amounts of tax concerned.
The Group’s Boards of Directors (the 'Boards’) own and approve the Tax Strategy which comprises the following four components:
a) Tax governance arrangements
The Group’s Boards review and approve all significant investment and business operating decisions directly or delegates the appropriate authority. Audit Committees and/or Boards within the Group consider significant tax related matters as part of the monitoring of internal controls and financial reporting arrangements.
The Chief Financial Officer is the member of the Executive Leadership Team with responsibility for tax matters. Day-to-day management of the Group’s tax affairs is delegated to the NWGL Group Tax Manager and to other appropriately qualified staff in the Group who have responsibility for specific taxes. All staff with responsibility for tax report to members of the Group’s senior management teams which, in turn, report to its Boards.
The Group’s tax affairs are conducted in a business-like manner in accordance with the Group’s commitment to corporate responsibility.
b) Tax risk management framework
Risk Committees and/or Boards within the Group oversee the risk assessment process applied by the business which includes an assessment of tax risks.
As far as possible, through the activities of its Boards, Committees and personnel responsible for tax matters, the Group seeks to manage the level of tax risk arising from its operations by ensuring appropriate processes and controls are in place.
The Group only takes tax positions which are justifiable and based on applicable law, with advice taken from reputable professional firms where necessary. In accordance with internal governance procedures, any transaction that is likely to have material tax consequences must be referred to the Boards.
To help manage tax risk, the Group’s taxation affairs are only handled by appropriately qualified and experienced staff and, where necessary, training is given to non-tax staff who are involved in processes which have tax implications.
The Group does not tolerate or condone any form of tax evasion, whether committed or facilitated by its own staff or any associated persons (e.g. agents and other persons who perform services for or on behalf of the Group) and manages this risk by the use of appropriate processes.
c) Approach to tax planning
The Group considers tax as part of its business decision making process. When entering into commercial transactions, the Group seeks to obtain the benefit of tax incentives, reliefs and exemptions available under UK tax legislation, consistent with the purpose and the letter of the law.
The tax affairs of the Group are arranged and managed in response to, and in support of, its business or commercial activities. Related party transactions are managed and documented to ensure they are in compliance with applicable tax law and practice.
d) Relationship with HMRC
The Group seeks to have a transparent and constructive relationship with HMRC on all taxation matters and keeps HMRC aware of significant transactions and business developments. All contact with HMRC is conducted in a professional and courteous manner.
The Group seeks to obtain certainty from HMRC at the earliest opportunity on the tax treatment of complex or uncertain issues or to establish the appropriate understanding or interpretation of the law. Discussions with HMRC are held at least annually to review past and present tax risks and agree on the steps required to take matters forward. Resolution of any disputed matters will be sought through open discussion and negotiation with HMRC, but the Group is prepared to litigate in cases where it believes the technical basis of a decision is incorrect.
The Group takes an active role in the development of UK’s legislative framework through participation at company or industry level in Government consultations on significant new tax laws.
Published – 18 March 2024