Royale TopCo Limited Tax Strategy for the year ended 31st December 2019
Royale TopCo Limited and its subsidiaries (the “Group”) operates and is headquartered in the United Kingdom. The Group’s principal activities are the franchise and operation of Burger King restaurants. The Company was incorporated on 7 September 2017. On 16 November 2017, a subsidiary of the Group, BKUK Group Limited, entered into a Master Franchise and Development Agreement with Burger King Europe GMBH, allowing BKUK Group Limited to become the Master Franchisee for England and Scotland.
The Group owns and operates 137 Burger King restaurants around England and Scotland and plans to continue to open around 30 new restaurants a year.
The Group acquired Banquets (B.K) Limited and KFG Quickserve Limited on 27 November 2019 and 30 December 2019 respectively, both of which operate a number of Burger King franchises around England. The Royale TopCo Limited approach to tax is applicable to all group companies. The tax strategy of the acquired entities has been aligned to the Group Tax Strategy.
The Group are UK registered trading companies and pays taxes in the UK.
The tax strategy has been agreed and approved by the Board
Tax planning strategy
The Group has a documented code of conduct. The group is committed, very simply to "doing what’s right". "Doing what’s right" means that everything we do to achieve our key business strategies must be done with the highest standards of ethics, honesty and integrity. Our philosophy is simple: integrity, honesty and compliance with the law are not optional. When it comes to ethics there is no compromise. All staff are required to follow these principles, including in all dealings in relation to tax. The other companies in the Group also follow these principles.
The Group ensures that all its tax obligations are met as required and seeks to ensure that tax is paid where and when it is due. The group does not seek to create or enter artificial tax planning schemes. The Group’s primary focus is on business operations. The Group does not actively seek to minimise the tax liability.
The Group follows the law and HMRC guidelines. The Group seeks professional tax advice in respect of contentious or complex tax issues, such as Payroll taxes, Capital allowances claims, tax implications arising as a result of Business Acquisitions, or Withholding tax in respect of royalties paid under the Master Franchising and Development Agreement to ensure compliance with the tax law.
While there are no cross-border operations, in case those arise, the Group would follow the terms of double tax treaties and relevant OECD guidelines in dealing with matters such as transfer pricing and establishing taxable presence.
Relationships with tax authorities
The Group works collaboratively and in a transparent and open manner with tax authorities to achieve certainty on a timely basis.
If the amount of tax due were subject to a significant degree of uncertainty, the Group would actively engage with the tax advisers and the relevant tax authorities to seek binding rulings as to the correct treatment.
By working with local tax authorities, where possible in real-time through an open relationship, the Group increases certainty over its tax affairs.
Tax risk management
The Group’s risk management, including tax risks is overseen by the Board.
The Group undertakes regular quarterly meetings with the tax advisors in order to stay up to date with any tax developments and seeks professional tax advice when necessary.
The two key tax risks, and details of how the Group manages them are:
a. Complexity and changes in legislation – The Group is subject to a range of different taxes in the UK, each of which is governed by complex tax legislation. Such legislation is typically updated on an annual basis. To keep up with these changes, the Group ensures that its tax functions have access to tax updates and access to specialist training. The Group also utilises the services of external tax advisors as and when required.
b. Compliance and reporting risk – The Group is required to meet many different tax compliance and reporting obligations, non-compliance with which could result in penalties and interest. The Group uses a combination of timetables and checklists to ensure that all compliance and reporting obligations are met in accordance with statutory deadlines. The senior management team of the Group is responsible for ensuring that their businesses follow this tax strategy and that processes and procedures are adopted and followed. All our decisions are informed by our low risk appetite and by reference to the code of conduct.
The Group’s Chief Financial Officer (CFO) is responsible for the implementation of the Group’s approach to tax. As part of the annual financial reporting process, the CFO communicates relevant information on the Group’s tax position to the senior management team.
The responsibility for the day-to-day management of the Group’s tax operations is delegated to the members of the finance team within the Group. The vast majority of UK tax compliance is performed in-house with external tax advice sought on occasions when specialist expertise is required in respect of complex or contentious tax items or when the Group wishes to seek a second opinion on the tax position of a particular matter.
While there are no cross-border operations, due to the varying different tax obligations and legislation elsewhere around the world, non-UK tax matters would be typically outsourced to specialist advisors.
The Group incurs many different tax obligations. It pays corporate income taxes, customs duty, stamp duty, employment and other taxes. Additionally, the Group acts as a tax collector for VAT, employment taxes and other taxes which it then pays over to the tax authorities.
The Royale TopCo Limited approach to tax is applicable to all group companies. The tax strategy is reviewed and updated annually. This document complies with the Group’s duty under Paragraph 16(2) of Schedule 19 of the Finance Act 2016 to publish a group tax strategy for the year ended 31 December 2019.
Prepared by: Leo Koziel, Financial Accountant
Approved by: Tim Doubleday
On behalf of Royale TopCo Limited’s Board of Directors