Barclays 2010 Annual Report Download - page 83

Principal Risk Factor Principal Risk Management Key Specific Risks and Mitigation
13. Taxation Risk
Tax Risk is the risk that the
Group suffers losses
associated with changes in
tax law or in the interpretation
of tax law. It also includes the
risk of failure to comply with
procedures required by tax
authorities. Failure to manage
tax risks could lead to an
additional tax charge. It could
also lead to reputational
damage or a financial penalty
for failure to comply with
required tax procedures or
other aspects of tax law.
The Group’s strategy is to maximise returns for
shareholders whilst complying with relevant tax
laws, disclosure requirements and regulations
under an appropriate risk control framework.
The Group takes a responsible and transparent
approach to the management and control of its
tax affairs and related tax risk, specifically tax
risks are assessed as part of the Group’s formal
governance processes and are reviewed by the
Executive Committee, Group Finance Director
and the Board Risk Committee. The tax charge is
reviewed by the Board Audit Committee. Barclays
has adopted the Code of Practice for Taxation of
Banks (The Code) and has confirmed to HMRC
that it will have regard to the spirit of the law and
the intent of Parliament in managing its tax affairs.
The Group employs high-quality tax professionals
and takes appropriate advice from reputable
professional firms. Effective, well-documented
and controlled processes are in place to ensure
compliance with tax disclosure and filing obligations.
Where disputes arise with tax authorities with
regard to the interpretation and application of tax
law, the Group is committed to addressing the
matter promptly and resolving the matter with the
tax authority in an open and constructive manner.
During 2010 the Group settled open issues in a number of
jurisdictions, principally the UK and South Africa, including
agreement of the UK bank payroll tax liability with HMRC.
Governance and controls have been put in place to ensure
compliance with the UK government’s Code of Practice for
Taxation of Banks.
The profit forecasts that support the Group’s deferred
tax assets, principally in the UK, US and Spain, have been
subject to close scrutiny by management.
The Group continues to monitor the potential impact of
proposed taxes aimed at banks such as the UK bank levy
(see also page 207).
Barclays PLC Annual Report 2010 www.barclays.com/annualreport10 81
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