Tax strategy

This is our tax strategy for the financial year to 31 December 2024. We intend its publication to fulfil our obligations under Paragraph 16 ( 2 ) Sch 19 FA 2016. This tax strategy applies to all Allica corporate entities. 
 
At Allica, our mission is to give established businesses the no-nonsense banking they deserve.  We recognise that businesses have a responsibility not only to their shareholders but also to society at large. We are committed to being mindful of our social, economic, and environmental impact while ensuring we contribute positively to the communities we serve. That’s why we ensure we pay our taxes when due and always ensure our tax arrangements are in line with the spirit and letter of the relevant laws.

Risk management and governance arrangements

Allica manages tax risks under three key areas:

• Reputational risk, which concerns meeting customer and employee expectations on tax responsibilities;
• Compliance risk, related to timely and accurate tax filings and payments to avoid penalties;
• Transaction risk, which involves properly understanding tax implications of new products, acquisitions, or sales.

Tax risks are monitored through Allica’s Risk Management Framework using the three lines of defence model. The Audit Committee oversees the tax policy, with the CFO holding executive responsibility, supported by the Finance Director, Financial Controller, and Senior Tax Manager. External tax advisers are engaged as needed to ensure compliance and proper implementation of tax policies.

Tax risk appetite

Allica’s appetite for tax risk is low, ensuring we act with integrity regarding all tax matters. Allica Bank structures its business activities with the aim of maximising value for the Bank and our stakeholders.  As such, Allica has no appetite for undertaking transactions solely for the tax benefits arising and which have no commercial purpose or are against the intentions of Parliament. Similarly, no appetite is accepted for failure of routine filing and payment obligation risks.

Allica’s attitude to tax planning

We adhere to the principle that commercial activity should underpin any tax planning. We do not endorse activities that are clearly artificial or contrived and have no commercial purpose, or whose tax results clearly differ in outcome to the intentions of Parliament.

All transactions must therefore have a business purpose or commercial rationale. Due consideration will be given to the group's reputation, brand, corporate and social responsibilities when considering tax initiatives, as well as the applicable legal and fiduciary duties of directors and employees of the group and will form part of the overall decision-making and risk assessment process.

We do not enter into abusive tax planning arrangements. Our low-risk tax strategy is consistent with our adoption of HMRC’s Code of Practice on Taxation for Banks and any tax planning is, and is done in accordance with the Code.

We do not promote aggressive tax planning arrangements to our customers.

Allica’s approach to its dealings with HMRC

In line with our core company values, Allica aims to be straightforward in our dealings with HMRC and act with honesty, integrity, respect and fairness. When submitting tax computations to HMRC, we disclose all relevant facts, transactions, uncertainties ensuring that we are proactive in our discussions with HMRC and strive to meet all deadlines they set, ensuring we maintain an open and collaborative relationship with them.

We seek to resolve issues before returns are filed whenever practicable and engage in a co-operative, supportive and professional manner in all interactions.