ZPG seek to apply the spirit as well as the letter of the law with regards to UK tax legislation, believing that we should pay our fair share of tax on the profits arising from our success, and we do not plan to deviate from this embedded culture going forward.
ZPG is currently part of the technology sector, a dynamic and fast-paced industry, where there are added risks involved in companies keeping compliant with tax legislation that changes year on year. However, we are comfortable in the fact that the property sector and subscription-based revenue streams we are exposed to are relatively uncomplicated in terms of accounting and tax risk. Currently, we are materially comprised of UK entities involved in UK business only, mitigating the complexity and
risk that could arise if the Group was involved in international tax matters. We have one subsidiary in the Netherlands as a result of the Calcasa acquisition. All active overseas subsidiaries are trading entities operating in their own local markets and the operations of these entities are not currently material to the Group. We do not conduct any transactions with any overseas subsidiaries outside the usual course of business and we comply with all local, national and international tax regulations.
Our internal tax processes and procedures provide sufficient segregation of duties and we conduct extensive reviews, carried out on a hierarchical basis, in order to mitigate the tax risks involved in delivering accurate tax returns on a timely basis. Additionally, where appropriate, we seek professional opinion on tax matters to ensure our compliance with all tax obligations, the importance of which is paramount to our overall tax strategy.
Historically, we have always taken a conservative approach to tax planning and strategy. We intend to pursue the continuance of such an approach going forward. As such, no effective tax rate target is set by the Board and we have no motive or intention to enter into tax mitigation arrangements that could be considered as abusive in the current business climate.
Historically we have grown the business through acquisition, and if this trend continues, we will seek ‘acquisition-based’ tax advice as appropriate. Outside of these acquisition-based tax advisory pieces, we have no structured tax planning that could be considered abusive.
We believe that corporations should pay their fair share of tax, and we do not plan to deviate from this embedded culture going forward.
Overall, in the context of the UK large business climate we consider taxation to be low risk within ZPG. This is reinforced not only by a recent tax strategy review of the Group but also by our strong relationship with Her Majesty’s Revenue and Customs, where no significant issues arose during previous reviews of our corporation tax, VAT and employment tax systems and processes. Where findings are recognized we take this as an opportunity to update our processes. Further, our code of conduct is rooted to core values of honesty and integrity. Such values are ingrained in the business culture here at ZPG and prove integral to the way we carry out business extending from internal matters such as employee conduct to external affairs regarding UK tax compliance.
The publication of this tax strategy is considered to constitute compliance with the duty under paragraph 16(2) Schedule 19 Part 2 of Finance Act 2016.
The Annual Report and Financial Statements for the period ended 30 September 2020 can be found here.