Tax Strategy
Group Tax Strategy
Our group includes Eastern Pacific Shipping (UK) Limited, EPS Chartering (UK) Limited and other UK incorporated subsidiaries which form part of the Quantum Pacific Shipping group (the “Group”).
This document is published in accordance with paragraphs 19(2) and 22(2) of Schedule 19 of Finance Act 2016 for the financial year ending 31 December 2022 and covers all UK incorporated companies in the Group during the financial year ended 31 December 2021 and thereafter unless and until subsequently amended.
Our Tax Principles
Our approach to tax is summarised by the follow tax principles:
- Comply with all relevant laws and regulations.
- Consider tax in all major or complex business decisions.
- Meet all legal requirements and make all appropriate tax returns and tax payments.
- Comply with appropriate tax controls and processes and ensure there is sufficient oversight by the Board of Directors of each company in the Group.
UK Tonnage Tax
A key aspect of our corporation tax affairs in the UK relates to the election into the UK tonnage tax regime by a number of companies in the Group.
UK tonnage tax is a tax regime which was introduced by the UK Government and is designed to encourage shipping companies to base their shipping operations in the UK. It does so by providing a simple method of calculating the profits which should be subject to UK corporation tax and is based on the tonnage of the vessels operated rather than based on company profits.
In order to elect into and benefit from the tonnage tax regime, the relevant companies in the Group must meet a number of requirements which are strictly enforced by Her Majesty’s Revenue and Customs (“HMRC”). In particular, each relevant company in the Group is required to make an economic contribution to the UK through the strategic and commercial management of our vessels in the UK.
Our approach to Risk Management and Governance Arrangements
The Board of Directors of each company in the Group recognise the importance of maintaining robust tax compliance processes and considers it key to managing tax risk.
Overall responsibility for Tax Strategy and tax governance lies with the Board of Directors of each company, with day to day responsibility resting with the Senior Accounting Officer for the Group.
The Tax Strategy is applied consistently to all companies within the Group and is widely understood within the Group.
Reliance is placed upon external tax advisers where there is a need for specialist guidance. However, responsibility for tax and decisions around tax remain with the Senior Accounting Officer and Board of Directors of each company in the Group.
Our Approach to Tax Planning and Tax Risk
We do not engage in any tax planning that does not support a genuine commercial activity. We will not structure any transactions for the sole purpose of obtaining a tax benefit or in a way that would have tax results that are inconsistent with the economic substance of the business activity being undertaken. If there is any uncertainty, external advice will be obtained as necessary to confirm the correct position.
The Group takes a responsible approach to managing its tax affairs and seeks to comply with all statutory obligations. Third party advice is sought where it is considered appropriate, typically where there is a material level of uncertainty or complexity. The Group’s approach to tax risks follows the same principles that apply to other business risks and includes consideration of reputational and other non-financial risks. By being tax compliant the company aims to minimise tax risk.
Our approach to dealings with HMRC
We ensure that HMRC is kept aware of significant transactions and changes in the business and we seek to discuss any tax issues arising at an early stage.
We are committed to being open, transparent and proactive in our relationship with HMRC. Accordingly, we will actively engage with HMRC, where appropriate, and disclose all relevant facts and circumstances relating to the Group’s current, future and past tax events.