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Guardian Media Group Tax Strategy 2019

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Guardian Media Group Tax Strategy 2019 1 Guardian Media Group Tax strategy 2 Guardian Media Group Tax strategy This tax strategy applies across About Guardian Media Group Group strategy and results the Guardian Media Group. This Guardian Media Group is one of the UK’s The Group has continued to implement document, approved by the leading media organisations. We exist to its strategy to build deeper relationships Executive Board of Guardian support quality, independent and liberal with our audience based on their trust in journalism. Our core business is Guardian Media Group plc sets out the our high quality independent journalism News & Media, one of the world’s leading which reflects our editorial purpose and our Group’s approach to conducting news publishing organisations. mission. its tax affairs and dealing with The parent company of the Group is The The financial target of the three year plan set tax risks for the year ended 31 Scott Trust Ltd, a UK tax resident company, out in 2016 was for GMG’s news and media March 2019. Guardian Media which was established to secure the business (GNM) to break even at EBITDA level financial and editorial independence of the Group regards the publication before exceptional items by April 2019 in Guardian in perpetuity. order to provide a sustainable future for the of this tax strategy as complying The Group has business operations in Guardian. This target has been achieved with with the duty under paragraph the UK, US and Australia. All companies GNM delivering an EBITDA of £0.8 million in 16(2) of Schedule 19 of the in the Group are incorporated in these 2018-19. Finance Act 2016. countries, hold all of the Group’s assets and For the year ending 31 March 2019 the Group are fully subject to prevailing tax laws and reported revenues of £224.5m, up 3% on regulations. the previous year with growth in reader The Group also has an endowment fund revenues, growth in digital advertising which exists solely to support and fund revenues and international growth more than our journalism. The endowment fund offsetting declines in newsstand sales and consists of diversified medium and long print advertising revenues. term focused investments managed by a number of specialist fund managers. The The Guardian is supported by the Scott Trust investments include global and emerging Endowment Fund. The value of the fund and markets equity, fixed income, hedge funds other cash holdings stands at £1.01 bn. (2018: and private equity and venture capital £1.01bn). The value of these holdings reflects funds. Whilst the investments are a mixture cash being transferred from the Endowment of UK and non-UK assets, they are all held Fund to meet operational cash outflows by UK tax resident companies in the Group of GNM, offset by the underlying growth which are fully subject to UK tax laws and in investments. regulations on all of the income and realised gains arising from all of the investments held. Our tax position in the year- ended 31 March 2019 Our values The Group is committed to reporting on its CP Scott, the famous Manchester Guardian tax position in a transparent manner and editor, outlined the paper’s principles in makes extensive disclosures relating to tax in his celebrated centenary leader on May 5, its annual financial statements. An abridged 1921. The much-quoted article is still used version of the disclosures for the year-ended to explain the values of the present-day 31 March 2019 detailing the corporation newspaper, Trust and Group. The values he tax position of the Group is included as an described are: honesty; cleanness (today Appendix to this document. interpreted as integrity); courage; fairness; The Group’s business operations in the UK, and a sense of duty to the reader and US and Australia have historically been the community. loss making. These historic losses were legitimately used to offset taxable profits and gains that arose in the year which meant that the Group paid no Corporation Tax in the year ended 31 March 2019. The Group collects and pays indirect and payroll taxes in the countries in which it operates. In 2019, the Group collected and paid £42.9 million of income taxes and social security associated with its employees. 3 Guardian Media Group Tax strategy Our tax strategy Our approach to governance regulations and preventing and reducing tax disputes and uncertainty. Our tax strategy seeks to enable and support arrangements and risk the Group’s business strategy by managing management This is achieved by maintaining documented tax risks and costs in a manner consistent policies and procedures in relation to tax risk with The Scott Trust values. Governance arrangements management and maintaining open and constructive relationships with Our tax strategy consists of four key The Guardian Media Group plc Board tax authorities. principles: approves the Group’s tax strategy. From an operational perspective, the Audit Committee, made up primarily of Our attitude towards tax 1. We manage our tax affairs in a manner independent non-executive directors, is planning consistent with the values of The Scott considered to be the supervisory body for all Our attitude to tax planning is governed by Trust and the organisation’s purpose Group tax activities and monitors on-going the four key strategic principles detailed to secure the financial and editorial compliance with the tax strategy. above in the ‘Our tax strategy’ section. independence of the Guardian in The Group may engage in tax planning perpetuity and to support journalistic The head of tax is responsible for ensuring in order to manage its tax costs and an freedom and liberal values. that appropriate procedures and guidelines are established, and suitable training and assessment of the appropriateness of doing so 2. We seek to act lawfully and with integrity education provided to support the four is made against all four principles to ensure when managing our tax affairs by paying strategic principles detailed above. they are adhered to. and collecting tax in accordance with The head of tax meets regularly with the External tax advice is taken from time to time all relevant laws and regulations in the Chief Financial Officer to discuss tax matters where clarification of the tax implications of countries in which we operate. If we as they arise including the impact of the the Group’s activities is required. discover instances of non-compliance we introduction of new tax legislation on the seek to resolve them with the appropriate group, the tax implications of changes to the Our approach towards our tax authority. group’s operations and the outcomes of tax dealings with HMRC 3. We only engage in reasonable and risk management reviews. A constructive relationship with HMRC is sustainable tax planning that is aligned The head of tax reports at least annually to important in the operation of the Group’s tax with commercial and economic activity. the Audit Committee on the tax position of strategy. This means: the group and the on-going adherence to the We engage in an open and transparent way tax strategy. ▶ We do not enter into artificial tax with HMRC to allow them to fully understand our tax affairs. Where appropriate we engage arrangements; Risk management with them on a timely basis and seek advance ▶ We only respond to tax incentives and Tax risks can arise as a result of changes in clearance, either formally or informally, exemptions in the manner in which they tax legislation and changes to the Group’s on the tax implications of a transaction or a were intended; and underlying operating model, systems and change to our business. ▶ All transactions between Group processes. The head of tax is responsible We have a track record of pro-actively companies are carried out on an arms- for ensuring that the Group’s tax position bringing tax issues in our business to the length basis. and tax risk management procedures are attention of HMRC and collaboratively regularly reviewed to enable the appropriate 4. We are open and transparent with tax working with them to resolve these as quickly management of tax risk. authorities and provide all relevant and as possible. reasonable information that is necessary The tax function actively assesses and for them to fully understand our tax monitors UK tax risk throughout the year Criminal Finances Act 2017 by maintaining a detailed tax risk register, affairs. We ensure suitable policies and procedures which documents the processes and controls are in place to prevent or minimise the risk implemented to mitigate the risks. The tax of our employees, agents, suppliers or other risk register is reviewed regularly during third parties associated with us facilitating the year to ensure its completeness and to tax evasion as reflected in the Criminal check the effectiveness of the processes Finances Act 2017. and controls. The outcomes of the reviews are discussed with the Chief Financial We will undertake, and periodically Officer and, where issues are identified, new refresh, a risk-based assessment of our processes and controls are designed and business activities to identify such risks and implemented. ensure procedures are adequate. We will communicate the policy and ensure adequate The level of risk in relation to UK training is provided. taxation that we are prepared to accept The Group has a low appetite for tax risk and manages its tax affairs accordingly. Whilst standardised, acceptable levels of tax risk are not formally documented or quantified, tax risk is primarily managed with the aim of complying with all relevant laws and 4 Guardian Media Group Tax strategy Appendix 1. Corporate tax charge 2019 (£ m) Corporate tax charge Abridged tax disclosures Corporate tax charged in the income statement: 0.2 in the Guardian Media Corporate tax charge 0.2 Group plc financial statements for the year 2.
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