• act with integrity in all tax matters;
• work together with the tax authorities to build positive long-term relationships;
• where disputes occur, to address them promptly and openly; and
• manage tax to maximise value for our customers and shareholders.

Tax Governance Framework

Responsibility for the tax policy and management of tax risk rests with the Group Chief Financial Officer and Group Tax Director who report the Group’s tax position regularly to the Group Audit Committee. In addition, the Group’s tax risk status is reported regularly to the Group Risk committee.

We are seeking to achieve a Low Risk rating with HMRC, and have commenced briefing HMRC on the Group’s tax issues on a real time basis. This will continue during 2011.

Total UK tax contribution

The corporation tax charge in the income statement for the year was £272m. This represents an effective tax rate for the period of 24.9% (2009: 21.4%). The corporation tax charge for the period is different to the corporation tax paid in the year mainly due to the timing of corporation tax instalment payments, changes in provisions in respect of tax risks, and the recognition of deferred tax for accounting purposes.

Legal & General paid and collected tax of £470m in 2010, an increase of 20% from 2009. Corporation tax payments in 2010 amounted to 13% of the total tax contribution. Other taxes borne by the Group include irrecoverable VAT of £36m and employer’s NIC of £31m.

In addition to this, Legal & General collected taxes including PAYE deductions of £168m on pension payments, PAYE and NIC deductions of £94m from staff remuneration, VAT and Insurance Premium Tax of £43m and stamp duty of £29m.

The relative percentage of the total UK tax contribution in 2010 is: