Tax Strategy Statement
This document sets out the tax strategy for Hobbycraft Group Limited and its subsidiaries (herein referred to as “Hobbycraft” or "the Group") as required by Part 2 Schedule 19 of Finance Act 2016. The document is effective for the year ending 19 February 2023 and will be periodically reviewed and updated.
The document outlines Hobbycraft’s policy and approach to conducting its tax affairs and dealing with tax risk. The strategy applies to UK taxation, including corporation tax, indirect taxes (including VAT, customs duties and plastic packaging tax) and employment taxes which are payable and reportable to HM Revenue & Customs (HMRC).
The Group’s tax strategy is to ensure that it complies with all tax laws wherever it does business and that it pays all taxes that it is legally required to pay as and when they fall due.
Management of tax risks
Overall responsibility for the governance of Hobbycraft lies with the Board of Directors, which has the aim of ensuring that the Group meets its commercial objectives, whilst ensuring it is fully compliant with its financial obligations. The Chief Financial Officer has responsibility for tax at Board level and tax is regularly discussed at the Audit Committee. The Group’s tax policy, which is approved by the Board, drives the Group’s behaviour in regard to taxation and tax risk.
Hobbycraft has an experienced finance team which, under the management of the Chief Financial Officer and Head of Finance, and with appropriate support from trusted external advisors, works with the business to ensure that:
- The strategy is adopted and followed consistently across the Group, with clear lines of responsibility and accountability;
- The strategy is clearly aligned with Hobbycraft’s overall approach to corporate governance and risk management; and
- The Group pays the correct amount of tax required of it as determined by law, at the correct time.
The Hobbycraft Governance Steering Committee, chaired by the CFO, meets quarterly and reports directly to the Board of Directors and the Audit Committee. Tax is a key risk area within the remit of the committee, which covers:
- Oversight of the quality of governance, processes and decision-making;
- Monitoring legal and regulatory developments and compliance;
- Assessment of risks to the business, consequences and mitigation;
- Liaising with operational directors on risk, business impact and change requirements/recommendations as appropriate;
- Monitoring progress against agreed actions.
Transactions across the business are typically consistent in nature and the Group has a limited overseas presence. Hobbycraft considers sufficient controls and processes are in place to meet the Group's tax strategy.
Attitude towards tax planning
The tax strategy is aligned with the Group’s values and approach to conducting business. The Group takes a prudent approach to tax management and does not participate in any tax planning arrangements that are not commercially driven and that do not comply with either the letter or spirit of the law
The finance team seeks support from professional advisors for certain tax compliance obligations, and when tax matters arise:
- That are deemed sufficiently complex or material to the Group;
- Where there is a significant degree of tax uncertainty;
- Where tax guidance is unclear; or
- Where there is insufficient expertise or knowledge to adequately assess the tax risks and consequences of transactions under consideration.
The level of risk the Group is prepared to accept for UK taxation
The Group aims to identify and mitigate tax risks to a low level of risk, taking the same approach to evaluating tax risk as it does in considering any commercial or business risk. Transactions are based on commercial values with the intent to comply with all relevant laws including applicable tax laws.
The Group maintains a Corporate Risk Register, which tracks certain key tax risk areas.
Working with HMRC
Hobbycraft’s engagement with HMRC is professional, transparent and proactive across all relevant taxes and duties. Where issues do arise the Group seeks to resolve these through agreement with HMRC in a collaborative, timely and co-operative manner, with the assistance of external professional advisors where it is deemed appropriate.
This tax strategy was approved by the Board of Directors of Hobbycraft Group Limited on 23 March 2023.