GRI Compliance / Economic

Tax 2019

For Management Response click here.

For Reporting Boundaries and Methodologies click here.

REFEstadoDisclosureOur Response

GRI 207-01

Partial Disclosure

Approach to tax

  1. A description of the approach to tax, including:
    1. whether the organization has a tax strategy and, if so, a link to this strategy if publicly available;
    2. the governance body or executive-level position within the organization that formally reviews and approves the tax strategy, and the frequency of this review;
    3. the approach to regulatory compliance;
    4. how the approach to tax is linked to the business and sustainable development strategies of the organization.

The Board of Directors of Babcock International Group PLC has ultimate responsibility for the tax strategy of the Group. Responsibility for implementation of / continued compliance with this strategy lies with the Group CFO, who is supported by the Group Head of Tax, who assumes day to day responsibility in this area.

Further details on our approach to tax can be found in our Annual Report and Financial Statements on page 189.

The Group meets its legal obligation to make its tax strategy publicly available on its website.

GRI 207-02

Partial Disclosure

Tax governance, control, and risk management

  1. A description of the tax governance and control framework, including:
    1. the governance body or executive-level position within the organization accountable for compliance with the tax strategy;
    2. how the approach to tax is embedded within the organization;
    3. the approach to tax risks, including how risks are identified, managed, and monitored;
    4. how compliance with the tax governance and control framework is evaluated.
  2. A description of the mechanisms for reporting concerns about unethical or unlawful behavior and the organization’s integrity in relation to tax.
  3. A description of the assurance process for disclosures on tax and, if applicable, a reference to the assurance report, statement, or opinion.

The Board of Directors of Babcock International Group PLC has ultimate responsibility for the tax strategy of the Group. Responsibility for implementation of / continued compliance with this strategy lies with the Group CFO, who is supported by the Group Head of Tax, who assumes day to day responsibility in this area.

On an annual basis, the Head of Tax gives a full tax presentation to the Board, which will include:

  • A summary of the Group’s tax strategy;
  • A summary of the Group’s level of compliance with tax laws in all relevant jurisdictions (including timely tax filings and tax payment processes).

At the end of the second quarter of the accounting period, the Group submits its annual SAO (Senior Accounting Officer) self-certification, in respect of Tax Controls Frameworks and ensures its tax controls and processes are as good as possible in order to help it achieve the highest levels of tax compliance.

GRI 207-03

Partial Disclosure

Stakeholder engagement and management of concerns related to tax

  1. A description of the approach to stakeholder engagement and management of stakeholder concerns related to tax, including:
    1. the approach to engagement with tax authorities;
    2. the approach to public policy advocacy on tax;
    3. the processes for collecting and considering the views and concerns of stakeholders, including external stakeholders.

At Babcock, we strive to have an open and collaborative dialogue with tax authorities. In particular, this includes a regular dialogue with HM Revenue & Customs in the UK in respect of all relevant tax matters, including the Group’s HMRC risk rating, which is assessed annually.

As set out in the Group’s tax strategy document, the Group ensures compliance with UK Government Contractor Guidelines.

 

GRI 207-04

Partial Disclosure

Country-by-country reporting

The reporting organization shall report the following information:

  1. All tax jurisdictions where the entities included in the organization’s audited consolidated
    financial statements, or in the financial information filed on public record, are resident for tax
    purposes.
  2. For each tax jurisdiction reported in Disclosure 207-4-a:
    1. Names of the resident entities;
    2. Primary activities of the organization;
    3. Number of employees, and the basis of calculation of this number;
    4. Revenues from third-party sales;
    5. Revenues from intra-group transactions with other tax jurisdictions;
    6. Profit/loss before tax;
    7. Tangible assets other than cash and cash equivalents;
    8. Corporate income tax paid on a cash basis;
    9. Corporate income tax accrued on profit/loss;
    10. Reasons for the difference between corporate income tax accrued on profit/loss and the tax due if the statutory tax rate is applied to profit/loss before tax.
  3. The time period covered by the information reported in Disclosure 207-4.

Babcock is supportive of new tax compliance and disclosure regimes within the UK and elsewhere, such as Country-by-Country-Reporting and the new Transfer Pricing documentation requirements.

Further details on our approach to tax can be found in our Annual Report and Financial Statements on page 189.