The Group has an established Tax Control Framework (“Framework”) to which it adheres to. For ease of reference, the Framework is set out in the Appendix to the Strategy document. Leading from the Framework are governing principles and policies embedded within the wider Group organisation.

The London branch is aligned on its Senior Accounting Officer (“SAO”) responsibilities and obligations thereunder. While the Group has a Tax function comprising of adequately qualified staff to manage the tax affairs of such a Group, it leverages the wider Finance function in each geographical location in which it operates with sufficient support from local external professional advisors to manage its tax affairs. All tax compliance and reporting requirements are the responsibility of local Finance functions, and any advisory or governance issues are responsibility of the Group tax function.

All business transactions, products, client relationships, and counterparties are purely driven by commercial and business needs. Accordingly, any tax outcome is consequential. Tax review and / or due diligence on business transactions and commercial matters are conducted to identify documentation requirements, tax indemnities and warranties provided (or required) by the Group, and where a choice of [tax] outcome is available, to opine on the most suitable outcome in relation to the proposal. The wider Tax control framework incorporates the necessary attention required.

The Bank in the normal course of its business does not provide any tax advice or direction to its clients, counterparties, or to third party agents. Accordingly, any tax planning undertaken by the Group whether on its own corporate affairs, financial and economic products, or other transactions, is limited to choosing only an optimal outcome where a choice of outcomes are available.

Generally, planning undertaken by Group tax is commensurate with scheduling or forecasting rather than schemes. Given this, the Group considers itself to be fairly benign on a risk of challenge for tax planning.

The Group intent is to pay its fair share of taxation in all the jurisdictions it operates in, reflecting its presence and substance, and is mindful of its commitments to the wider environment including, its obligation as a good corporate citizen.

The Group manages its tax risk within the wider Risk Framework and policies of the Group; it has no appetite for unnecessary tax risks, either planned or consequential. All tax risks are captured within the Group’s operating model and each business manages its own tax risk matrix with proper engagement with Group Tax, Local Finance, and including use of professional tax advisors as necessary.

The Group operates a 3 Lines of Defence [3-LoD] Risk model with the Group Tax function residing within the wider Group Finance function, which is a direct support function and Control part of the model. Commensurate not only with the complexity of each Business division but also each jurisdiction in which the Group operates, appropriate nexus among Business management, Finance function, Tax function, and external [local] advisors are held at periodic times. In addition, application of regulatory differences between the Financial and Taxation Regulators may need to be considered and accordingly business management appraised with input from Group [Regulatory] Compliance function. Further, the self-assessment nature of the UK Regulatory environment is noted and where specific requirements are identified, monitoring and controls are incorporated as approved by local Senior management with assistance from external advisors as well as input from Group Tax.

The Group Internal audit function as a 3rd line of Defence in the Risk model performs its duties in ensuring tax risks are mitigated. Any issues arising are attributed to the correct function and addressed within a reasonable timeframe.

A periodic dialogue is undertaken with the Tax authority in each of the jurisdictions in which the Group operates and an annual meeting with each local Authority with an open and transparent dialogue is encouraged as supported by local tax authority.

Within the UK the key persons responsible for contact with HMRC are primarily the UK CFO supported by local professional tax advisors, and ultimately the Group Head of Taxation.