Introduction

This document explains how Transport UK Group (”TUK”) manages taxes and the associated risks.

This strategy document is considered to comply with the statutory obligation under Para 16(2), Schedule 19 of the United Kingdom Finance Act, 2016 for Transport UK Group and all its subsidiaries.

Tax Governance and Risk Management

The TUK Board of Directors has total oversight of the tax affairs of TUK.

The organisation within TUK is focused on ensuring that all important decisions concerning tax matters are reviewed by group finance, and that TUK meets its tax requirements every year.

The group finance team has specific tax responsibilities for the group, including coordination of the tax return process and communication with tax authorities. It produces a periodic tax report which is delivered to the Chief Financial Officer and the Board of Directors which includes current tax positions and an update on compliance.

Part of the Group’s governance is that measures are taken to control the tax risks. These are identified, assessed, and managed. The risks are discussed with the Board of Directors and measures are taken to bring them into line with TUK Group’s risk appetite.

The operating companies within the group manage their tax obligations through their finance departments with oversight from group finance. All TUK group entities engage external consultants for additional support on tax compliance and tax issues where necessary. This can include forthcoming changes in tax legislation or an uncertain tax position.

The Board of TUK have total oversight of all taxation matters.

Approach to Tax Planning

Taxation in a technical specialist discipline requiring significant expertise and management focus to ensure that TUK acts in accordance with laws and regulations. TUK acts in socially responsible manner and the fundamental principle to taxation is that we act to ensure the right amount of tax is paid in full compliance with the purpose and intent of the law. Taking a responsible attitude to tax also means refraining from establishing structures in which saving tax is the primary objective. Transactions are entered into when they serve a real commercial purpose. This is the case if the tax consequences of such transactions are proportionate to the commercial effects, both qualitatively (in terms of complexity) and quantitatively (in terms of financial impact).

Our current operations are purely focused within the United Kingdom. All our entities are registered in the UK and we therefore apply UK tax legislation across all taxes applicable.

Relationship with Tax Authorities

TUK attaches great importance to good relations with the tax authorities. TUK takes a proactive approach to its tax affairs to reach an agreement on important topics. TUK has a Customer Compliance Manager (“CCM”) at HM Revenue and Customs, who we regularly liaise with to discuss live tax matters on an ongoing and current basis.

Tax Risk Management and Risk Appetite

TUK submit accurate and complete declarations and pay our tax obligations on time. Given the scope of activities and the resulting tax obligations, process related tax risks are inevitable. We proactively seek to identify, evaluate, manage and monitor these risks to ensure they remain in line with the group’s tax risk appetite. Where there is significant uncertainty or complexity in relation to a risk, external advice may be sought.

The TUK Group is risk averse in relation to Taxation and its related obligations.

Social Responsibility

Taxes are the primary source of revenue for governments. These revenues are used to fund general facilities which, in the case of TUK, are of major importance. For example, they may include rail infrastructure. The TUK Group believes that it has an obligation to deal with taxes in a socially responsible way.