We are committed to tax transparency. We have engaged with various NGOs to discuss their concerns about tax responsibility and also our own tax position as a significant investor in other companies. We continue to talk to companies about their tax policy and management as part of our overall environmental, social and governance engagement.
Tax strategy and approach
We aim for our tax affairs to be transparent and sustainable in the long term. Our tax strategy supports our Group strategy and the way we do business. It is clear about what we will and will not do. It is reviewed regularly with responsibility for this and management of tax risks resting with the Group Chief Financial Officer and Chief Tax Officer.
- Meet all legal requirements; make all appropriate returns and payments.
- Always consider the Group’s reputation, brand and corporate and social responsibilities.
- Consider tax as part of every major business decision.
- Discuss in real-time our interpretation of the law with HMRC.
- Operate appropriate tax risk governance processes, including Board oversight.
- Contribute to the development of UK and international tax policy and legislation where appropriate.
- Not undertake transactions whose sole purpose is to create an abusive tax result or which are outside of the Group’s risk appetite or are not in line with our Group Code of Ethics.
Paying and collecting taxes is an important part of our role as a business and our contribution to society. We want to pay the right amount of tax, in the right place at the right time and work with HMRC in real time and on a transparent basis.
Customers, staff and society
Tax is an important and integral part of our business. We recognise that our stakeholders not only include our investors, customers and employees, but also the wider society.
Paying tax is part of how our business contributes to society. Taxes provide public revenues for governments to meet economic and social objectives, including the creation of jobs, generating business for suppliers and building infrastructures.
Our total tax contribution is one of our inputs into wider society and the tables and charts below provide further information of the taxes that we have borne and collected in 2015 in each of the jurisdictions that we operate in.
We work with the charity Tax Volunteers which provide free expert caring independent advice for older people.
Our Tax Facts app is packed with useful information, including key dates, tax tips, and calculators.
2015 total tax contributions
Our contribution to governments and society involves more than just corporate income taxes on profits but also employer taxes, irrecoverable VAT and property taxes borne by the Group.
We also collect taxes on behalf of governments such as employee taxes deducted through payroll, policyholder taxes and insurance premium tax.
Our total tax contribution which includes taxes borne and collected for 2015 was £947million (2014: £794 million). The majority of our taxes borne and collected arise in the UK. For 2015 this totalled £813 million (2014: £653 million).
Taxes borne are all taxes levied on a company which are its cost and will affect its results. This includes corporate income tax, employer’s national insurance contributions (payroll taxes) and business rates. It is a company’s direct contribution to tax revenues.
Taxes collected are taxes borne by employees and customers but collected by the Group and paid over to governments. Taxes collected include employee income tax and national insurance contributions (payroll taxes), policyholder taxes and insurance premium taxes charged to customers. It is generated by the company’s business activity and is part of its indirect contribution to tax revenue.
The tables and charts below detail the taxes borne and collected by the jurisdiction in which we operate and by the type of tax. They also show our profits analysed by UK and overseas as well as the overseas profits by split by territory.
2015 total taxes borne and collected
UK taxes borne and collected
France taxes borne and collected
USA taxes borne and collected
Netherlands taxes borne and collected
Ireland taxes borne and collected
Bermuda taxes borne and collected
Profits: UK & Overseas
Overseas profits split by country
Note: We incurred losses totalling £14m from operations in Hong Kong , Ireland , India, Egypt and Germany.