Tax Strategy

Brammer Tax Strategy

Scope

 Introduction to Group Structure

This strategy applies to Brammer Ltd and to the group of UK companies headed by Brammer Ltd in accordance with paragraph 19 of Schedule 19 to the Finance Act 2016 (‘Brammer’). A list of the entities to which it applies is set out below. In this strategy, references to ‘Brammer Ltd’ or ‘the Group’ are to all these entities. The strategy is being published in accordance with paragraphs 19(2) and 19(4) of the Schedule.

This strategy applies from the date of publication until it is superseded. References to ‘UK Taxation’ are to the taxes and duties set out in paragraph 15(1) of the Schedule which include Income Tax, Corporation Tax, PAYE, NIC, VAT, Insurance Premium Tax, and Stamp Duty Land Tax. References to ‘tax’, ‘taxes’ or ‘taxation’ are to UK taxation and to all corresponding worldwide taxes and similar duties in respect of which the Group has legal responsibilities.

 

Recent Developments

In February 2017, Brammer Group and its subsidiaries was acquired by Advent International, a US owned private equity firm. 

Subsequently in September 2017, funded by Advent, an acquisition was made of the IPH group, headquartered in France, which is a European group of companies operating in a similar marketplace (but not in the UK).  The intention is to merge the businesses into a combined pan-European group of companies.

The UK operations of the Brammer business are fundamentally unaffected by these developments.  During 2018, a review will be undertaken of the Transfer Pricing charging mechanisms for the Group to ensure the UK business is adequately remunerated for services provided to the wider Brammer Group and subsidiaries.

 

Aim

Brammer is committed to full compliance with all statutory obligations and full disclosure to relevant tax authorities. The Group’s tax affairs are managed in a way which takes into account the group’s wider corporate reputation in line with Brammer’s overall high standards of governance.

 

Tax Principles 

Brammer’s Tax Governance Document, which has been formally adopted by the Board, is a written codification, for internal use, of Brammer’s policy for the management of taxes and attitude to risk and tax planning.

As well as detailing the responsibilities and principles and approach to taxes management, the Board agreed that:

Brammer Ltd's governance objective is to comply with all its legal requirements across the various taxes, in a manner and spirit that ensures we pay the right and responsible amount of tax.  Brammer adopts a low risk approach when considering tax planning and does not enter into aggressive tax planning measures, as reflected by the current low risk status with HMRC.” 

 

Governance in relation to UK taxation

  • Ultimate responsibility for Brammer Ltd’s tax strategy and compliance rests with the Board of Brammer Ltd;
  • Executive management of the group is delegated by the Board to the Chief Financial Officer (‘CFO’)
  • The Chief Financial Officer (‘CFO’) is the Board member with executive responsibility for tax matters;
  • Day-to-day management of Brammer Ltd’s tax affairs is delegated to the Head of Tax who reports to the CFO;
  • The Head of Tax is a fully qualified member of the Chartered Institute of Tax.
  • The Board ensures that Brammer’s tax strategy is one of the factors considered in significant business decisions and transactions undertaken;
  • The Head of Tax reports to the Board and Audit and Risk Committee on Brammer’s tax affairs and risks during the year, as well as on relevant tax issues arising from transactions entered into and from changes in legislation and changes to business operations;
  • The Group Internal Auditor’s requirement to monitor the integrity of Brammer’s financial reporting system, internal controls and risk management framework includes those elements relating to taxation.

 

Risk Management

  • Brammer operates a system of tax risk assessment and controls as a component of the overall internal control framework applicable to the group’s financial reporting system as well as to ensure compliance with the Senior Accounting Officer framework;
  • Brammer seeks to reduce the level of tax risk arising from its operations as far as is reasonably practicable by ensuring that reasonable care is applied in relation to all processes which could materially affect its compliance with its tax obligations;
  • Processes relating to different taxes are allocated to appropriate process owners, who mitigate key risks through the operation of appropriate controls and sign-off procedures. Key risks are monitored for business and legislative changes which may impact them and changes to processes or controls are made when required;
  • Appropriate training is carried out for staff who manage or process matters which have tax implications;
  • Significant transactions with tax implications are reviewed and advised upon by the Group Tax Manager. Advice is sought from external advisers where appropriate on areas of a complex, risky or specialist nature or where in the judgement of the Group Tax Manager, additional advice ought to be sought.  External advice is also sought in the development of an appropriate Transfer Pricing model that ensures the UK Group is adequately remunerated for the value added and services provided to the remainder of the European subsidiaries.
  • Continued compliance is ensured through appropriate training and literature as well as regular liaison with tax advisors and with HMRC.

 

Attitude towards tax planning and level of risk

Brammer Ltd adopts a non-aggressive approach to tax planning and tax compliance and this is reflected in the ‘low risk’ status classification by HMRC.

Brammer Ltd manages risks to ensure compliance with legal requirements in a manner which ensures payment of the right amount of tax.

When entering into commercial transactions, Brammer seeks to take advantage of available tax incentives, reliefs and exemptions in line with, and in the spirit of, tax legislation.  Brammer does not undertake tax planning unrelated to such commercial transactions nor enter into aggressive tax planning measures.

The level of risk which Brammer accepts in relation to UK taxation is consistent with its overall objective of achieving certainty in the group’s tax affairs. At all times Brammer seeks to comply fully with its regulatory and other obligations and to act in a way which upholds its reputation as a responsible corporate citizen. In relation to any specific issue or transaction, the Board is ultimately responsible for identifying the risks, including tax risks, which need to be addressed and for determining what actions should be taken to manage those risks, having regard to the materiality of the amounts and obligations in question.

 

Relationship with HMRC

Brammer seeks to have a transparent and constructive relationship with HMRC through regular annual meetings and ongoing communication with the Group’s dedicated Customer Relationship Manager (‘CRM’) and HMRC specialists.  Through these CRM meetings and in the course of ongoing conversations, developments in Brammer’s business and current, future and retrospective tax risks and interpretation of the law in relation to all relevant taxes are discussed. 

This ongoing relationship is also helpful in expediting tax claims and elections and seeking clarification on processes and advance clearances.

Accordingly, Brammer ensures that HMRC is kept aware of significant transactions and changes in the business and seeks to discuss any tax issues arising at an early stage. When submitting tax computations and returns to HMRC, Brammer discloses all relevant facts and identifies any transactions or issues where it considers that there is potential for the tax treatment to be uncertain.

Any inadvertent errors in submissions made to HMRC are fully disclosed as soon as reasonably practicable after they are identified. 

 

Transparency 

We liaise with HMRC on a regular basis and maintain an open and honest relationship with them and receive the same treatment in return.  This approach facilitates full compliance and helps resolve any potential difficulties quickly and efficiently.

 

List of entities covered by this Tax Strategy

Brammer Limited
Brammer UK Limited
Premier Bearing Co Limited
Newco 2010 Limited
Brammer Industrial Services Limited
Brammer Vending Limited
A I Robin Topco Limited
A I Robin Midco 1 Limited
A I Robin Midco 2 Limited
A I Robin Limited
A I Robin Finco Limited
Brammer Holdings No.3 Limited                  
Brammer Technical Sales Limited                       
Brammer Leasing Limited                                     
Monarch Bearings International Limited                 
Brammer Europe Limited                                       
BSL Engineering Limited                                       
APEX Bearings & Power Transmission Limited
Gemsis Limited                                                       
MECRO Limited                                                      
ABEC Transmission Products Limited                   
ABEC Fasteners Limited                                       
Bearing Stockists Limited                                       
Bearing Service Limited                                         
Brammer Dynamics Limited                                   
Brammer Hire Limited                                            
Brammer Services Limited                                    
Brammer Transmissions Limited                           
BSL Distribution Limited                                        
BSL Group Limited                                                
BSL Maintenance Man Limited                              
Camwin Investments Limited                                    
Castlerail Limited                                                   
Data Preference (UK) Limited                               
Electron Drives Limited                                         
Energy Services & Electronic Limited                   
Euro Electronic Rent Limited                                 
Jet Roulements Limited                                         
Lion Oil Tool (Rental) Limited                                 
Minett Fluid Power Limited                                   
United Electronic Holdings plc                               
BCEA Limited                                                         
E J Jack Limited                                                     
Bearing Sales Limited                                            
BSL Brammer Limited
Cumbria Bearings & Transmissions Limited
CBS Rotary Power Motion Limited
Mercia Engineering Supplies Limited