Introduction
The following sets out the tax strategy (the “Strategy”) of the companies (each, a “Company” and collectively, the “Companies”):
WM International Holdings Ltd
WM Regent, Ltd.
WM Birkdale, Ltd.
WM Capital Holdings Ltd
KFO Holdings, Ltd.
KWCP Holdings UK, Ltd.
PassportCard Limited
The Companies are part of a foreign group that is parented by White Mountains Insurance Group, Ltd. (White Mountains), an exempted Bermuda limited liability company listed on the New York Stock Exchange (symbol WTM) and Bermuda stock exchange (symbol WTM.BH). Information on White Mountains can be obtained on its website.
The Companies are engaged in the business of making opportunistic and value-oriented acquisitions of businesses and assets in the insurance, financial services and related sectors, operating these businesses and assets through their subsidiaries and, if and when attractive exit valuations become available, disposing of these businesses and assets.
In making this Strategy available, the Companies consider that they have fulfilled their responsibilities under paragraphs 19(2) and 22(2) of Schedule 19 to the Finance Act 2016, as applicable.
Tax Strategy
Overview
The Company recognises that tax is an important feature of the business, affecting main products and services as well as being levied on the profits made from running the business. Examples of UK taxes that impact the Company are:
- Value Added Tax levied on the sale of goods and services by UK businesses;
- Pay As You Earn (the system for collecting income tax and national insurance from earnings); and
- Corporation Tax levied on profits generated by certain organisations such as limited companies in the UK.
Understanding tax risk, how to manage it, and how it impacts the Company is an important part of running the business responsibly. The Company is committed to fulfilling its tax obligations and being a responsible taxpayer in all jurisdictions in which it operates. This Strategy sets out the Company’s objectives and approach as approved by the Board of Directors.
A Senior Accounting Officer (SAO) has been appointed by the Company. The main duty of the SAO is to ensure that the Company establishes and maintains appropriate tax accounting arrangements.
The SAO is supported in this duty by the White Mountains global head of tax, who has primary responsibility for tax management along with other members of the group’s tax department and external tax advisers, who provide the Company with expertise and assistance across the tax spectrum.
Objectives
The Company’s primary objectives as it relates to tax are:
- To file all the appropriate tax returns and make all required payments in each of the jurisdictions in which it and its subsidiaries operate.
- To comply with all tax laws, regulations and rules in the countries in which it and its subsidiaries operate.
- To claim reliefs and incentives in line with the provisions of the tax law, where available.
How the business manages UK tax risk
The Company aims to manage tax risk in a similar way to any area of operational risk.
The Company’s Board of Directors approves the Strategy on a yearly basis. At that time, the Board meets with White Mountains' global head of tax who has primary responsibility for tax management along with other members of the group’s tax department and finance staff (including the Company’s SAO). The White Mountains group as a whole, including the Company, has a risk assessment process to identify, measure and record all material tax risks. Tax risks are assessed and documented in line with the risk management framework and appropriate controls are put in place to mitigate the key tax risks identified from this process. As a part of this process, the Company seeks to engage with external tax advisors to access expertise and assistance when considered appropriate.
The business’s attitude to tax planning
The commercial requirements of the Company’s operations are the most important factor when analysing business decisions and tax planning is only conducted in this context. The Company does not enter into any transactions where the whole or main purpose is tax avoidance. The Company will however, utilize any entitlement to legitimate tax incentives and reliefs within the applicable tax laws and regulations.
White Mountains’ tax department, in conjunction with the SAO and outside tax advisors, undertake the majority of the tax activities for the Company and its subsidiaries.
The level of risk the business is prepared to accept for UK taxation
The Company has a low appetite for tax risk, including UK tax risk, and uses the above risk management framework to monitor and manage tax risk. Tax evasion (or the facilitation thereof) is not tolerated by the Company.
How the business works with HMRC
The Company wishes to maintain good working relationships with the Tax Authorities and other relevant bodies in the territories in which it and its subsidiaries operate.
To achieve this, the Company is committed to dealing with the tax authorities in an open, honest and pro-active manner. The Company will:
- disclose any errors or mistakes in tax returns to the relevant tax authorities as soon as practically possible;
- respond to enquiries raised by tax authorities in an open, full and timely manner, to progress enquiries as quickly as possible.