The University is an independent corporation established by Royal Charter and, by virtue of the educational nature of its objectives, is an exempt charity under Schedule 3 of the Charities Act 2011. It therefore qualifies as a Charitable Company under Part 11 of the Corporation Taxes Act 2010 and benefits from exemptions and reliefs from taxation in the UK.
However it will be rare for the University to benefit from exemptions that exist in other overseas tax jurisdictions.
This tax strategy applies to the University of Leeds and all its subsidiary companies in accordance with paragraph 19 of Schedule 19 to the Finance Act 2016. In this strategy, references to the University are to the University of Leeds and its active UK subsidiaries.
This strategy has been published in accordance with paragraph 16(4) of Schedule 19 of the Finance Act 2016 by being made available on the Universitys website. References to UK Taxation are to the taxes and duties set out in paragraph 15(1) of Schedule 19 of the Finance Act 2016, which include Income Tax, Corporation Tax, PAYE, NIC, VAT, Insurance Premium Tax and Stamp Duty Land Tax. References to tax, taxes, taxation are to UK taxation and to all corresponding worldwide taxes and similar duties in respect of which the University has legal responsibility.
Where taxation obligations exist, the University aims to observe and comply with all tax legislation relevant to the University and its subsidiaries, including the timely, accurate submission of returns and payment of all taxes due.
This strategy applies from the date of publication until it is superseded and reflects the strategy for the relevant financial year. It will be reviewed annually and updated accordingly in response to sector and legislative developments.
The Universitys policy in conducting its tax affairs is aligned with its overall strategic plan. The University is committed to conducting its tax affairs consistent with the following principles:-
1. Comply with relevant laws, rules, regulations, statutory reporting and disclosure requirements wherever it operates.
2. Apply professional diligence and care in the proactive management of all risks associated with tax matters, achieve certainty of tax treatment wherever possible, and ensure that governance and assurance procedures are appropriate.
3. Foster constructive, professional and transparent relationships with tax authorities, based on principles of integrity, and collaboration.
4. Take advantage of available reliefs, exemptions and incentives in order to optimise its tax position in the conduct of its activities but will not use them for purposes which are knowingly contradictory to the intent of Parliament and the spirit of the relevant legislation.
5. In circumstances where alternative interpretations or approaches might result in different tax outcomes the University will use its best judgement to determine the appropriate course of action. The University will not enter into transactions that have a main purpose of gaining a tax advantage or intentionally make interpretations of tax law that are opposed to the original intentions of the legislation.
The Council is the Universitys governing body and it is responsible for approving corporate strategy and associated plans and budgets; for determining major business decisions and corporate policy; for the framework of governance management; and for monitoring institutional and executive performance. Therefore Council has effective overall responsibility for the tax strategy of the University. The Audit and Risk Committee has responsibility for overseeing the Universitys overall risk management and systems of internal control.
Executive responsibility for the management of the Universitys tax affairs rests with the Chief Financial Officer. The Director of Finance reports to the Chief Financial Officer and has day-to-day authority to manage the tax affairs of the University and oversee those of the subsidiary entities.
The University has a central tax department and a payroll department, both work with the aim of ensuring that all taxation obligations and risks are identified and managed appropriately.
The tax and payroll departments act as business partners to staff in the Faculties and Services across the University group to keep abreast of changes in activity in order to provide advice on tax implications arising therefrom and in accordance with generally accepted best practice, the tax implications of new activities are considered by Finance during the business planning process.
The Universitys tax and payroll departments are staffed with appropriately qualified individuals who update their knowledge through CPD and participate in various taxation, charity and higher education focused associations to maintain and develop their knowledge of taxation and keep up-to-date with changes in legislation, interpretation and best practice.
This knowledge is shared with finance staff and those who make tax decisions across the organisation through internal training to highlight tax issues and treatments unique to the HE sector. A Tax Section is maintained on the Finance website and a VAT helpline is provided to support University colleagues.
Internal control procedures and processes exist within the University finance departments and systems with the aim of ensuring that information and documents that underpin taxation returns and submissions are accurate and complete. Taxation returns and submissions are subject to appropriate levels of internal review prior to their submission.
If the tax treatment of specific transactions or other matters is uncertain or requires external consideration or confirmation or involves a specialist area of taxation for which the Universitys tax team does not have the necessary knowledge then the University seeks professional advice from suitably qualified, external advisors.
The University aims to have a constructive and transparent relationship with HMRC and other tax authorities wherever it operates around the world. All dealings with tax authorities will be conducted professionally, courteously and collaboratively, and the Universitys aim is to meet all its statutory and legislative tax requirements.
The Universitys tax and payroll teams are committed to maintaining a good relationship with HMRC and benefit from having a dedicated Customer Compliance Manager (CCM). There is a commitment to minimise the Universitys risk profile with HMRC by demonstrating openness, competence and responsiveness and by the application of strong reliable governance, systems and controls so that the need for regular detailed review of the Universitys activities by HMRC is minimised; including seeking clarification from HMRC where there is doubt as to the correct tax treatment.
This will be evidenced by the following:
The University and its overseas operations are committed to preventing the facilitation of tax evasion by associated persons anywhere in the world. This is done through developing reasonable procedures, carrying out due diligence and risk assessments of our activities and creating awareness and a culture of compliance throughout the University.
The University operates to the highest legal and ethical standards and will not tolerate acts of criminal facilitation of tax evasion by its associates. Staff and other associates should abide by University policies at all times.
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