MITSUKOSHI(U.K.)LIMITED – UK Tax Strategy
MITSUKOSHI (U.K.) LIMITED (“the Company”) is a wholly owned UK subsidiary of Isetan Mitsukoshi Limited, a company established in Japan. The ultimate parent company is Isetan Mitsukoshi Holdings Ltd. and The Isetan Mitsukoshi Group (“the group”) was created in 2008. The Company was incorporated in 1974 whose line of business includes offering safe, secure and reliable Japanese-style products to customers in the United Kingdom. The company has not resumed trading since the cessation of its operation in September 2013.
The purpose of this document is to set out the Company’s UK tax strategy for conducting its tax affairs and managing tax risk. The document addresses the following matters:
・Governance arrangements in relation to UK taxation;
・The Company’s attitude to tax planning;
・The level of tax risk that the Company is prepared to accept;
・The Company’s approach towards its dealings with HMRC
Governance arrangements in relation to UK taxation
The ultimate responsibility for UK tax matters rests with the UK Directors. They work collaboratively with the Overseas Business Headquarters within the parent company to perform the following duties in order to manage the overall tax strategy and for tax compliance:
・Ensuring that tax is calculated based on the profit of the accounts prepared in accordance with Generally Accepted Accounting Principles;
・Ensuring that taxes are paid on time and tax returns are submitted on time;
・Assessing the impact of changes in relevant tax laws and implementing the necessary course of action to deal with these changes;
・Claiming tax relief, where applicable, based on the relevant Double Taxation Agreement;
・Checking the overall accuracy of the tax returns and maintaining effective quality control;
・Consulting with external tax advisors on matters involving uncertainty or complexity
The Company is small in size and scale and has relatively simple operations in the UK due to its cessation of trading activities. The expectation is that there will be infrequent and minor changes to the business model. As a result, the Company considers its UK tax risks to be limited.
The Company manages its tax risks and complies with statutory requirements in a manner that not only ensures the proper conduct of comprehensive risk management surrounding taxation, but also ensures payment of the appropriate amount of tax that is due and at the right time. The Company believes that its tax risks are effectively managed by the internal review process and by the use of external professionals, as outlined below:
・The Company engages with external recognised professional accountants to ensure tax compliance;
・The Company has its financial statements audited by an Independent Auditor on an annual basis;
・There is an effective monitoring control process which exists within the group, which itself has a robust corporate governance policy;
・When there are changes in tax law and/or new tax compliance requirements arise, the Company liaises closely with its external tax professionals.
The Company complies with the Corporate Criminal Offence legislation which came into effect on 30th September 2017.
The Company’s attitude to tax planning
・The Company does not engage in aggressive tax planning arrangements that it believes would be contrary to the intentions of Parliament;
・The Company utilises tax incentives, reliefs and exemptions where these are explicitly permitted within the prevailing tax legislation;
・Professional assistance from external consultants in respect of judgemental tax matters is obtained, as and when required.
The level of tax risk that the Company is prepared to accept
・The Company adopts a low-risk tax strategy and carefully considers the tax implications of all major transactions;
・The Company does not seek to engage in aggressive or artificial tax schemes which do not reflect genuine commercial activity;
・The Company’s procedures and controls are designed to ensure that the tax risk will be managed to a reasonably low level.
・The company and the group will remain committed to ensuring fairness in its business practice.
The Company’s approach towards its dealings with HMRC
・The Company is committed to working with Her Majesty’s Revenue and Customs (“HMRC”) in a professional manner on all current, future and past tax matters;
・The Company aims to have a collaborative, transparent and proactive relationship with HMRC;
・Where there may be uncertainty in the application of UK tax law, the Company will seek proactive feedback from the tax authorities to ensure adherence to UK tax law.
In summary, the Company is committed to acting with integrity and collaborating with HMRC.
The strategy has been approved by the UK Board of Directors and will be reviewed annually. It is effective from the accounting period which ended on 31 March 2019.
The Company considers that the information above will satisfy the requirements on qualifying companies as legislated in Finance Act 2016 schedule 19, Part 2 paragraph 22.