ClearBank is committed to complying with applicable tax laws, regulations, statutory obligations and full disclosure to the tax authorities in respect of taxation matters. ClearBank recognises how taxation plays a key role in the economy and contributes towards the sustainable development of society. The statements below comply with the requirements to publish a tax strategy for the year ended 31 December 2022, under paragraph 16(2) Schedule 19 Finance Act 2016.
Managing Tax Risks
The Board of Directors hold ultimate responsibility for ensuring the effective management of tax related risks, overseeing risk management practices and fostering a risk-aware culture coupled with thoughtful risk-taking. In addition, the Board is ultimately responsible for tax strategy and compliance.
Executive responsibility for tax matters lies with the Chief Financial Officer, while responsibility for day-to-day matters is delegated to the Head of Financial Control, Tax and Financial Control teams. Individuals with responsibilities over the Bank’s tax affairs are equipped with appropriate knowledge, skills, qualifications and capabilities, and where required, are assisted by external advisors.
The Risk Management function performs a second line role, providing independent and objective challenge to the business in the effective operation of the risk management system
Risk Management Approach
Tax risk is managed in a similar way to any other area of financial or operational risk through management procedures that have been put in place. Adherence to risk management protocols together with an associated governance structure ensures an effective process to identify and manage risks.
ClearBank aims to control tax risks to ensure that material losses do not arise and actively seeks to identify, monitor, mitigate and manage tax risks through risk assessment procedures and controls as part of the group-wide Enterprise Risk Management Framework (ERMF). ClearBank’s risk management approach and ERMF are supported by the 3 Lines model which also includes the financial reporting and tax risk in the taxonomy.
Through this approach, process owners review activities and processes to identify risks (including tax risks) and to implement and maintain mitigating controls as well as monitor them for business and/or legislative changes which could impact them. Advice is sought from reputable external advisers where appropriate.
Attitude towards Tax Planning
ClearBank adopts a conservative approach to tax planning, which is based on prudent interpretation of tax legislation and aligned to the substance of the economic and commercial activity of the business. The bank’s tax principle is to undertake planning and transactions that are underpinned by genuine commercial drivers and economic factors. As a business, ClearBank seeks to benefit from available tax incentives (such as Research & Development Expenditure Credits), reliefs and exemptions in line with, and in the spirit of the tax legislation, all the while cognisant of its obligations to its communities and wider society.