Holland & Barrett

Tax Strategy

Context

The principal activity of the Group is the international sale of Health & Wellness products across multiple jurisdictions. As of 30 September 2022, the Group operated a total of 1,040 stores and employed on average 7,993 associates across Europe. The Group packages, markets, retails and wholesales a broad line of nutritional supplement products, including vitamins, minerals and herbal remedies, sports powders and drinks, as well as health food products which range from chilled and frozen to fruits, nuts, snacks and other items. We have differentiated ourselves from our mass market competitors by developing a specialist reputation, whilst at the same time offering high quality products at competitive prices.

The Group aims to create long-term value for shareholders. We strive to be a worldclass operator, a responsible corporate citizen and a good employer. Our business activities generate a substantial amount and variety of taxes. The taxes we pay and collect form a significant part of our economic contribution to the countries in which we operate. We are committed to complying with tax laws in a responsible manner and to having open and constructive relationships with tax authorities.

Commitment to Compliance

Our purpose is to create value on a sustainable basis by ensuring our commercial activities are organised in a tax efficient manner, whilst also ensuring compliance with all tax law and practice in the territories in which we operate, including the UK which is our main place of business. In doing so we take into account the interests of all of our stakeholders and ensure effective interaction with tax authorities and transparency in relation to our tax affairs. Compliance for us means paying the right amount of tax in the right place at the right time, disclosure of all relevant facts and circumstances to the tax authorities and the claiming of reliefs and incentives where available while operating in line with the commitments of this strategy.

Attitude toward tax planning

In structuring our commercial activities, we will consider, among other factors, the tax laws of the countries within which we operate with a view to maximising value on a sustainable basis for our shareholders. Any tax planning undertaken must:

  • Support genuine commercial and economic activity;
  • Be structured in a way such that the tax results are not inconsistent with the underlying economic consequences;
  • Comply with generally accepted custom and practice, in addition to the law and the intentions of parliament;
  • Be of a type that the tax authorities would expect;
  • Be consistent with, and be seen to be consistent with, the Group’s purpose and values; and have regard to the potential impact on our reputation and broader goals. We will not undertake planning that is contrived or artificial. The Group will, where necessary, engage external advisors to help us manage our tax position where there is significant uncertainty or complexity relating to a particular issue.

Level of tax risk accepted

We acknowledge that tax risks will arise from time to time in relation to the interpretation of tax law and the nature of our tax compliance arrangements, given the size of our business. While the Group does not have a prescribed level of acceptable tax risk, tax risks are identified, evaluated, managed and monitored on a case by case basis to ensure they remain in line with the Group’s overall low tax risk appetite. Where there is significant uncertainty or complexity in relation to a risk, external advice may be sought from our professional advisors and also discussed with HMRC to ensure transparency and compliance in our approach.

Approach to dealing with HMRC

We have a positive relationship with HMRC which is based on honesty, integrity, respect and fairness and in a spirit of co-operative compliance. We communicate with HMRC on a regular basis via our interactions with our Customer Compliance Manager (“CCM”) and we proactively engage in discussions with HMRC to resolve uncertain tax matters. We will seek to resolve any disputed matters through proactive and transparent discussion and negotiation with HMRC.

Approach to tax risk management and governance arrangements

This strategy is approved, owned and overseen by the Group’s Executive Committee. The governance of tax risk follows the tax accounting controls and formal procedures required by the Senior Accounting Officer (“SAO”) legislation which ensures that significant tax related decisions are subject to review and approval by appropriately qualified and experienced staff and that all UK tax obligations are met. The Group has a strategic aim to achieve a low tax risk rating as determined by HMRC’s Business Risk Review process. Specifically, the Head of Tax takes responsibility for day-to-day tax affairs whilst the Group Chief Financial Officer holds the ultimate responsibility for tax and is also the designated SAO.

The publication of this strategy statement is regarded as satisfying the statutory obligation under Para 16(2), Schedule 19, Finance Act 2016 for all the companies in the Holland & Barrett Group as disclosed to our CCM.

The Group adopts a similar approach to tax compliance, planning, risk, governance and dealings with the relevant tax authorities in all the jurisdictions in which it operates.