De La Rue
Tax Strategy

This strategy has been published in accordance with Schedule 19 to the UK Finance Act 2016 and was approved by the De La Rue plc Board on 24 May 2022. It applies to De La Rue plc and subsidiaries, which have operated within the principles of this paper for many years and have a low appetite for tax risk. It is important to De La Rue plc that the Group pays the correct amount of tax at the right time complying with all relevant tax laws and regulations in the jurisdictions in which the De La Rue companies conduct business.

De La Rue’s overall tax policy framework is to:

• Comply with all relevant laws and disclosure obligations;
• Deal transparently, professionally and appropriately with all tax authorities;
• Seek to utilise available tax reliefs and incentives where available in a manner which is consistent with the government’s policy objectives;
• Consider the tax impact in major or complex business decisions, for example in relation to acquisitions and disposals;
• Operate in an environment where we consider tax in the context of our reputation;
• Maintain accounting systems and controls sufficient to support tax compliance obligations;

and it will not:

• Enter into artificial or contrived structures or schemes where the whole or main benefit is the avoidance of tax; or
• Be a party to tax evasion, nor tolerate the facilitation of tax evasion by any person(s) acting on the Group’s behalf, consistent with the requirements of the Criminal Finances Act 2017 (often known as “Corporate Criminal Offence” rules).

Our approach to risk management and governance arrangements

As an organisation we are fully committed to ensuring that the highest ethical standards are embedded throughout our business and we act with complete integrity in every transaction we undertake. This is supported by De La Rue’s company values and Code of Business Principles and is reflected in our approach to risk management and tax risk.

Responsibility for tax governance and strategy lies with the Chief Financial Officer, with oversight of the Board and the Audit Committee. Application of the strategy on a day to day basis is managed by the Director of Tax and Treasury, supported by the in-house tax team.

De La Rue’s in-house tax department is staffed by qualified, experienced tax professionals, and they undertake the majority of tax activities. The tax team will identify, manage and where possible eliminate tax risk. The tax team will seek external tax advice where there is a need for specialist guidance and support and many compliance activities, filings and liaison with tax authorities are undertaken by or in conjunction with De La Rue Finance Managers or external providers.

Attitude towards tax planning and tax risk

De La Rue’s approach to tax risk follows the same principles that apply to all other business risks.

Reputational risk and corporate social responsibility are particularly important to De La Rue especially considering that many of our customers are Governments across the world, including the UK. Therefore, we will not undertake a tax planning project without due regard being given to any potential impact this may have on the wider Group business or reputation. Where a potential tax planning project is material it will only be implemented after prior authorisation has been received from the Chief Financial Officer and approval from the Group Board where necessary.

External tax support in relation to tax planning or structuring advice may be sought in the context of complex transactions, principally to provide challenge to technical interpretation and ensure compliance with relevant statute and to ensure that business decisions are undertaken in the full knowledge of current and likely interpretations of legislation and guidance.

Level of tax risk

De La Rue takes a responsible approach to managing our tax affairs and will seek to comply with applicable tax laws and regulations in the countries in which we operate.

De La Rue generally has a low appetite for tax risk and will not participate in aggressive planning arrangements. With regard to commercial transactions, tax risks are considered alongside other financial and reputational impacts to the Group as part of the business’ commercial risk assessments. De La Rue has no appetite to undertake transactions whose sole purpose is to create a tax benefit unless it is a benefit that is understood to be intended by relevant tax legislation. In the UK, the Group has a low risk rating with HMRC and we wish to maintain this.

Our approach to dealings with HMRC and other tax authorities

De La Rue engages with all tax authorities, including HMRC, in a professional, open and collaborative manner. We aim to respond to information requests in a timely manner and ensure that access is given to all relevant information. We take care to ensure that our tax affairs are reported accurately. If we were to identify an error in a submitted tax return, we would seek to rectify it as soon as reasonably practical to do so and disclose where appropriate.

Where tax law is unclear or subject to interpretation, professional advice or advance clearance from the tax authorities will be sought to ensure that De La Rue has a strong tax technical filing position. If a clearance or ruling exists we expect the Group and the tax authority to honour this.

From time to time, our views (or those of our advisors) on the appropriate tax treatment in any given case may differ from those of the tax authorities. Where such circumstances arise, we will work constructively and proactively with the tax authorities in question with a view to achieving a resolution to any matters arising.

Only if, exceptionally, we cannot reach agreement with a tax authority and our position is validated by external advice, or where there is an industry-wide issue, would we be prepared to litigate on matters where agreement cannot be reached through discussion. We would consider the potential impact on our reputation and on our working relationship with the tax authority before doing so.

In summary, De La Rue is committed to ensuring it pays the correct amount of tax and to working collaboratively with tax authorities to ensure it is continued to be regarded as a low-risk business.

Last review: May 2022 
Next review due: May 2023