HMRC Tax Strategy

The Clearswift Group[1] is headed by the UK entity named Clearswift Holding Limited (“Clearswift”), which is wholly-owned by RUAG Holding AG (“RUAG”) registered in Switzerland.  Clearswift’s tax affairs are managed in a way which takes into account the RUAG group’s wider reputation, its shareholder structure and standards of governance.

This document, approved by the RUAG Group Executive and Clearswift Boards, sets out Clearswift’s policy and approach to conducting its UK tax affairs and dealing with tax risk. It is available to all Clearswift’s stakeholders. This document will be periodically reviewed by the RUAG Internal and External Tax teams, and any amendments will be approved by the Clearswift Board of Directors.

The range of UK taxes that the Clearswift Group pays includes Corporation Tax, VAT, PAYE and some other ad-hoc taxes. The document is intended to comply with the requirements of Schedule 19 of the Finance Act 2016.

In order to protect the interests of Clearswift and its shareholders, the Clearswift Group strives to comply with tax law and practice in all of the territories in which it operates, including UK which is the main place of business. Compliance for Clearswift means paying the right amount of tax in the right place at the right time, and involves disclosing all relevant facts and circumstances to the tax authorities and claiming government reliefs and incentives where available and operating in line with the commitments of this strategy.

This annual strategy statement, last published in November 2018, is split into four sections, seen in the overview.

Overview

1. Governance

2. Planning

3. Risk

4. The approach to HMRC

1. Governance

Clearswift’s Board of Directors and executive management are guided by external and internal tax specialists, as is appropriate and applicable, for each of the regions in which it operates. RUAG is represented on the Clearswift Board. Internal policies and procedures are regularly reviewed and amended to ensure adherence to relevant tax laws, rules and regulations. The tax strategy is aligned to Clearswift and RUAG values and code of conduct. 

2. Planning

In structuring the Clearswift Group commercial activities, various factors are considered including but not limited to the tax laws of the countries within which Clearswift operates.

Clearswift’s attitude to tax planning

UK Tax Planning objectives: Clearswift aims for certainty regarding the tax positions adopted by the Group. Incentives and reliefs afforded by tax law will be claimed to appropriately mitigate tax costs of conducting its business activities. Clearswift will not knowingly enter into arrangements that are contrived or artificial. 

Tax planning is based on commercial business activity, and Clearswift does not implement or utilise tax avoidance strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations.

The Clearswift group structure is designed to be straightforward in order to support and meet operational needs, with only a necessary number of entities in place to aid transparency of trading activities between group companies and in order to comply with local legal obligations in both the UK and overseas. Where there is uncertainty as to the application or interpretation of tax law, appropriate advice is taken from third-party advisers.

3. Risk

How Clearswift manages tax risks

Clearswift’s UK tax strategy is aligned to its overall risk strategy. Given the scale of business and volume of tax obligations, risks will inevitably arise from time to time in relation to the interpretation of tax law and nature of various compliance arrangements. Clearswift believes that by approaching the control of risk in a strategic and organized manner, risk factors can be reduced to a level that is acceptable given its likelihood and impact. Clearswift proactively seeks to identify, evaluate, manage and monitor these risks to ensure they remain in line with the Group’s tax risk strategy. Where there is significant uncertainty or complexity in relation to a risk, external advice may be sought.

Senior executives are represented on the Clearswift Board of Directors. Senior executive management and the senior leadership team are responsible for assessing risk and any mitigation taken.

Centralisation of control systems aid both governance and performance reporting.
The business’s internal governance has evolved such that, where there is significant uncertainty or complexity in relation to a risk, external advice may be sought.

4. Approach to HMRC

Due to the relatively small size of the business and lack of complexity in its tax affairs, Clearswift does not have a Customer Relationship Manager (CRM) at HMRC. Correspondence with HMRC is either direct or through its external UK tax adviser. The Clearswift Group strives to engage with HMRC with honesty, integrity, respect, and fairness and in a spirit of co-operative compliance.

[1] Clearswift Group comprises the UK entities known as Clearswift Holding Limited, Clearswift Limited and Clearswift Technologies Holdings Limited (including various overseas subsidiaries of Clearswift Technologies Holdings Limited)