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Tax Strategy

This paper sets out the tax strategy of Leicester City Football Club Limited...

Leicester City Football Club Limited  Tax Strategy

This paper sets out the tax strategy of Leicester City Football Club Limited and its UK subsidiary undertakings (“LCFC”), and in making this strategy available LCFC is fulfilling its responsibilities under Schedule 19 of the Finance Act 2016. This tax strategy applies to all UK taxes applicable to LCFC and the document is owned by the Board of Directors of LCFC (“the Board”).  It will be reviewed annually, updated as appropriate and approved by the Board. The Board is responsible for setting and monitoring the strategy. The finance team of LCFC are accountable to the Board for the implementation of the tax strategy and the management of tax and related risk.

LCFC’s Tax Strategy is guided by LCFC’s position as a leading Premier League Football Club which requires strong governance and consideration of our reputation, while delivering returns to our shareholders.  Our tax strategy reflects the heavily regulated nature of our business, which requires further compliance with local laws, regulations and guidance and the underlying belief of all the stakeholders including the Board and the Shareholders that compliance with the tax legislation also is a part of an organisations social responsibility to its community.  Accordingly, the level of risk the Group is prepared to accept is Low. 

How LCFC manages its tax risks

LCFC’s on-going approach to UK tax risk management and governance is based on the principles of reasonable care, and ensuring we comply with our status as a high profile football club as detailed above. LCFC maintains on-going application of tax governance with strong internal controls in order to substantially reduce tax risk to acceptable levels. As part of this governance, LCFC has identified tax risks, which are maintained on risk registers, and their materiality is assessed based on a corporate risk matrix which records the potential impact on the Company if the tax risk crystallises and the relative likelihood of it crystallising.

The tax risk registers are subject to regular review processes to ensure that they are continually updated and that the risks are adequately managed with documented reviews and escalated to higher management levels and the Board if appropriate.

LCFC train relevant employees in relation to the tax risks which might affect the business and specialist advice is sought in relation to complex or significant business transactions.  Regular communication is undertaken with advisors to ensure that LCFC and relevant staff remain up to date with tax developments.

LCFC’s attitude to tax planning

LCFC does not engage in aggressive tax planning and will not engage in artificial transactions the sole purpose of which is to reduce UK tax. However, LCFC will consider undertaking a transaction in a way that gives rise to UK tax efficiencies such as capital allowances providing this is aligned to LCFC’s commercial and social objectives and complies with the associated UK tax legislation.  LCFC will not engage in tax efficiencies if the underlying commercial objectives do not support the position, or if the arrangements impact upon LCFC’s reputation, brand, corporate and social responsibilities, or future working relationships with HMRC.

LCFC and its tax risks

LCFC’s strategic aim is to achieve a low UK tax risk rating as determined by HMRC’s Business Risk Review process through the following actions:

- The submission of all UK tax returns on a timely basis, including sufficient detail to enable HMRC to form an accurate view of the affairs of the company filing the return with an adequate supporting audit trail and sign-off process;
- paying the appropriate amount of tax at the right time.
- being transparent about the filing position it has taken;
- maintaining tax accounting arrangements which are robust and accurate
- ensuring that the departments who are involved in LCFC’s tax processes are both adequately resourced, supported and that key personnel are retained in order to manage tax compliance issues on a timely basis; and
- ensuring all tax filing positions are supported with appropriate documentary evidence.

LCFC considers it is not able to completely eliminate tax risks however the above procedures are intended provide a Governance structure and control environment which reduces that risk to appropriate level.

Working with HMRC

LCFC will comply with all relevant legal disclosure and approval requirements and all information will be clearly presented to HMRC as appropriate. In its dealings with HMRC, LCFC will act in an open, honest and transparent manner.  LCFC’s Finance Team senior management are responsible for interaction with HMRC and implementing the strategic aim to avoid unnecessary disputes with HMRC and thus minimise tax risk, and seek to achieve this through:

(a) holding face-to-face meetings with HMRC either directly or through industry groups to discuss current business initiatives and the associated tax reporting and practice;

(b) where appropriate, seeking pre-transaction clearances from HMRC; and

(c) making the tax compliance procedures and controls available for review by HMRC upon request.

(d) LCFC will further

- Consider significant/uncertain transactions with its advisors and in the light of current industry standards and HMRC guidance.
- Interpret legislation/guidance through its internal finance and legal teams and with external guidance from its advisors.

This Tax Strategy document is communicated to all the relevant stakeholders within the Company, from the Senior Executives who are making regular commercial decisions to those individuals who are involved in the daily tax processes/procedures that we operate, so that it is firmly embedded in the culture that we adopt. This Tax Strategy will be subject to continuous review by these stakeholders to ensure that LCFC is adhering to its strategic aims and objectives and these performance reviews will be documented and made available to the Board as part of its annual review.

Issue Date:  31 May 2018 – relating to Financial Year Ending 31 May 2018

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