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Linde UK Tax Strategy for the financial year 31 December 2018
The Linde Group is a leading gases and engineering company with around 63,000 employees working in more than 100 countries including the UK. The strategy of The Linde Group is geared towards long-term, profitable growth and focuses on the expansion of its international business with forward-looking products and services.
The Linde Group has adopted a code of ethics (the “CoE”). It explains The Linde Group’s corporate visions, values and principles – safety, integrity, sustainability, and respect. The standards set out in the CoE determine how members of The Linde Group shall maintain their relationship with customers, suppliers, governments, other businesses, the environment and people. One key principle is full compliance with laws and regulations. The CoE provides guidance on how to comply with laws and regulations. As members of The Linde Group the Linde UK companies adhere to these standards.
This tax strategy applies to all Linde UK companies. The tax strategy is set out with reference to the UK sub-group (“LUKG”) headed by Linde UK Holdings Ltd. It also applies to the UK sub-groups headed by Linde Gas Holdings Ltd and Lansing Group Ltd and the companies Hydrogen Supplies Ltd, Refrigeration No.1 Ltd and Electrochem Ltd (which are not members of any UK sub-group) all of which are members of The Linde Group. References to LUKG should be read as references to the relevant UK sub-group or company.
LUKG is aligned with and follows the CoE and the wider Linde guiding principles and tax policy.
This tax strategy is approved by the board of directors of Linde UK Holdings Ltd (the “Board”) and sets out LUKG’s approach to risk management, the level of risk it is prepared to accept, its governance arrangements in relation to UK taxation, attitude to tax planning and cooperation with HM Revenue & Customs.
It is compliant with the requirements of Schedule 19 of Finance Act 2016.
Approach to risk management
LUKG is committed to managing its tax affairs in a responsible and transparent manner and to complying with applicable tax legislation.
Satisfying LUKG’s tax obligations is a complex process due to its wide-ranging business activities and the ever-changing tax landscape. Uncertainties arise in the application or interpretation of law, resulting in tax risks.
LUKG maintains robust processes and controls which are designed to minimise the risk of errors which could impact the amount of tax that it pays. These processes and controls are regularly monitored, reviewed and tested and underpin the preparation and submission of its tax returns.
Level of risk in relation to UK taxation that LUKG is prepared to accept
The level of risk that LUKG accepts in relation to taxation is consistent with its overall objective of achieving as much certainty as possible with respect to its tax affairs. At all times LUKG seeks to comply fully with its regulatory and other obligations and to act in a manner consistent with LUKG’s commitment to best practice in corporate governance and responsible corporate citizenship.
In relation to any specific issue or transaction, the LUKG’s finance director (the “Finance Director”) with oversight from the Board is responsible for identifying risks, including tax risks, which need to be addressed and for determining what actions should be taken to manage those risks, having regard to the materiality of the amounts and obligations in question. LUKG does not operate pre-defined limits as to the amount for acceptable tax risk; it is judged on an issue by issue basis.
Governance arrangements in relation to UK taxation
The Board is responsible for tax governance. The Board has delegated this responsibility to the Finance Director who reports to the Board as required.
In turn, the Finance Director has delegated responsibility for particular UK taxes to the appropriate department heads within LUKG. LUKG’s key taxes are managed day to day as follows:
|UK tax||Responsible person|
|Amounts for which LUKG is accountable under PAYE regulations||Payroll Tax Manager|
|Value added tax||Head of Accounting|
|Corporation tax||Head of UK Tax|
The Head of UK Tax holds relevant professional qualifications and is required to maintain his professional competence via the continuing professional development requirements of these professional bodies.
The Head of UK Tax reports to The Linde Group’s Head of Tax.The competence of the UK tax team (which includes the Head of UK Tax) is ensured via annual tax training in accordance with their roles. The UK tax team tackles technical queries on all taxes raised by other departments managing LUKG’s various tax obligations. External advice may be sought in areas of complexity or uncertainty to support LUKG in meeting its tax strategy.
Attitude of LUKG towards tax planning
LUKG has a responsibility to its shareholder to structure its affairs in an efficient manner. Any tax planning activities undertaken shall be compliant with tax laws and supported by solid business reasons to sustain a credible long term reputation with its stakeholders and in particular with the tax authorities. Profits are taxed with regard to the value chain. LUKG does not engage in artificial tax arrangements.
Accordingly, it utilises tax incentives or opportunities for obtaining tax efficiencies where these:
- are not considered to carry significant reputational risk or significant risk of damaging its relationship with HM Revenue & Customs,
- are aligned with the intended policy objectives of the UK government in introducing the incentives, and
- are aligned with its business objectives.
Approach of LUKG towards its dealings with HM Revenue & Customs
LUKG engages with tax authorities with honesty, integrity and fairness and aims to be transparent and cooperative in its dealings with them.
In case of a disagreement concerning a ruling, interpretation or decision of HM Revenue & Customs LUKG will first seek to resolve any dispute through pro-active and transparent discussion and negotiation.