Tax

About

The Tax team manages the VAT and Corporation Tax affairs of the College to ensure that the College is compliant with current tax legislation. It also oversees the VAT and Corporation Tax affairs of its subsidiary companies to ensure that those entities are also compliant with current tax legislation. As part of this responsibility, the team manages the College’s relationship with HM Revenue & Customs. This involves ensuring that the College’s tax obligations are met in a timeously and appropriate manner including submitting various tax returns in a correct and appropriate fashion. 

Imperial Tax Strategy

Purpose

This Tax Strategy sets out Imperial College’s (“Imperial’s”) policy and approach to conducting its tax affairs and management of tax risk.

The strategy applies to Imperial and to its subsidiary companies.  A list of the entities to which it applies is set out below.

The strategy is reviewed annually by the Director of Tax and Treasury in response to any significant change in tax legislation and/or the financial affairs of Imperial.  Any amendments are approved by the Chief Financial Officer.

Taxation Status

In the UK, Imperial is an exempt charity within the meaning of Schedule 3 of the Charities Act 2011 and accordingly, is a charity within the meaning of Paragraph 1 of Schedule 6 to the Finance Act 2010.  As such, Imperial is potentially exempt from taxation in respect of income or capital gains received within categories covered by Sections 472-488 of the Corporation Tax Act 2010 and Section 256 of the Taxation of Chargeable Gains Act 1992. This includes teaching, research, publishing, ancillary services, royalties, most investment income and chargeable gains to the extent it is applied to exclusively charitable purposes.

In the UK, Imperial is partially exempt for VAT purposes as the provision of education by an ‘eligible body’ is an exempt supply.  Imperial has an agreed Partial Exemption Special Method with HM Revenue & Customs (“HMRC”) that governs its VAT attribution and accounting.

In the UK, certain commercial trading activities are operated through subsidiary companies. These companies are not charities and so do not enjoy similar tax exemptions from income or capital gains.  This income will attract VAT where applicable, and any profits are liable to Corporation Tax. Such taxable profits made by these companies are covenanted to the University and paid under Gift Aid which negates that tax liability.

Imperial operates in line with the Higher Education National Framework Agreement and participates in the Universities Superannuation Scheme.

Overseas, a range of different structures is operated, where the tax status derives from applicable local legislation.

Tax Policy

The Tax Strategy has the following core objectives:

1. Comply with all relevant tax, compliance, reporting and disclosure requirements wherever it operates, and pay the right amount of tax at the right time.
2. Ensure that the Tax Strategy is consistent with Imperial’s strategy, its approach to risk, and its core values.  
3. Manage the tax risks and opportunities arising from routine operations using suitable tax planning. The approach always respects the spirit of tax legislation and does not include policies and activities that may be considered tax avoidance by the relevant authorities or give rise to artificial tax advantage.
4. Foster constructive, professional, and transparent relationships with tax authorities, based on the concepts of integrity, collaboration, and mutual trust.
5. Apply professional diligence and care in the proactive management of all risks associated with tax matters, and ensure that governance and assurance procedures are appropriate
6. Ensure that staff with responsibility for aspects of taxation have sufficient knowledge of taxation to recognise the tax issues and act appropriately.

Governance

Ultimate responsibility for the day-to-day operation of Imperial’s tax affairs rests with the Chief Financial Officer. Reporting to the Chief Financial Officer, the Director of Tax and Treasury has day-to day authority to manage the tax affairs of Imperial and the Head of Tax reports to the Director of Tax and Treasury.

The Director of Tax and Treasury ensures that the Tax team:

• Is comprised of appropriately qualified, experienced personnel and is suitably resourced.
• Is committed to ongoing Continuing Professional Development to keep abreast of changes in legislation.
• Engages with departments across Imperial to provide tax advice and guidance as necessary and to ensure compliance with tax legislation.
• Seeks professional advice from suitably qualified external advisors where the tax treatment of specific transactions or other matters is uncertain or requires external consideration and confirmation.
• Maintains documentation of processes, procedures and controls.
• Uses systems where appropriate to improve the efficiency of complying with tax legislation, and in particular to identifying and classifying transactions which impact on taxation.
• Liaises with colleagues within the University sector through BUFDG and informally with others to ensure the University maintains sector best practice.

Attitude to Tax Planning

Imperial seeks to optimise its tax position by taking full advantage of available tax reliefs, exemptions and incentives aligned with, and in the intended spirit of, current tax legislation, thus retaining funds for Imperial’s core activities and strategic aims.

The University aims to pay the right amounts of tax legally due both in the UK and overseas, recognising that it has a fiduciary duty to act exclusively in its best interests as a charity. This duty makes it appropriate for the University to engage in reasonable and prudent tax planning and to take advantage of available statutory tax reliefs and exemptions.

Professional diligence and care is applied in the proactive assessment of tax risks, with a generally cautious approach to risk.

In circumstances where the correct amount of tax amount may not be clearly defined, or where an alternative interpretation or application of tax law might result in different tax outcomes, the risk will be assessed in a controlled manner, applying best judgement to determine the appropriate course of action. This will usually involve seeking advice from external professional advisers in support of our decision-making process. Imperial does not engage in transactions that have a main purpose of gaining a tax advantage or intentionally make interpretations of tax law that are opposed to what is generally accepted to be the original intention or spirit of the legislation.

Relationships with tax authorities

Imperial seeks to have a transparent and constructive relationship with tax authorities wherever it operates around the world. All dealings with tax authorities and other regulatory bodies are conducted professionally, courteously, collaboratively and in a timely manner to ensure that Imperial’s aim to meet all its statutory and legislative tax requirements globally are fully met.

As part of this, the Tax Team:

1. Has regular communication with HMRC, engaging in full, open and early dialogue with HMRC to discuss tax planning, strategy, risks and significant transactions.
2. Makes fair, accurate and timely disclosures as soon as reasonably practical after they are identified.
3. Proactively engages in dialogue with HMRC regarding issues where the correct treatment is uncertain.
4. Seeks to resolve issues with HMRC promptly.

Subsidiary bodies of the University

• IC Consultants Limited
• Imperial Activities Limited
• Imperial College Developments Limited
• Imperial College Projects Limited
• Imperial College ThinkSpace Limited
• Imperial College Innovations Limited
• Imperial Research and Innovation Singapore LTD
• One Portal Way Limited
• Wye College Foundation Trust
• IGG Limited by Guarantee

Contacts