Introduction and scope

The Pattonair Group (“Pattonair”) is a privately-owned group operating as the provider of supply chain management services to the aerospace and defence sectors in the world-wide market. It is headquartered in the UK, having operations in:

  • Brazil
  • Canada
  • China
  • France
  • Germany
  • Italy
  • Poland
  • Singapore
  • Spain
  • United Kingdom
  • United States of America

The UK Pattonair group is made up of twenty-one (21) UK entities, which includes active trading companies, several intermediate holding companies and three dormant companies.

Pattonair accounts for a wide range of UK taxes, mainly comprising corporation tax, value added tax (VAT), pay-as-you-earn (PAYE), National Insurance contributions (NIC) and withholding tax, as well as any local taxes in the territories in which we operate.

The following paragraphs set out Pattonair’s tax strategy as approved by the Board of directors. The tax strategy is aligned to our overall business strategy and encompasses our commitment to comply with all the relevant rules and regulations in all the territories where we have a presence, to declare and pay all tax liabilities on a timely and responsible basis, and to deal with tax authorities with transparency and integrity at all times while protecting and delivering value to our primary shareholders.

Tax objectives

Our key tax objectives are as follows:

  • to ensure payment of all tax obligations and compliance with all applicable tax rules and regulations on a timely basis;
  • to regularly assess and monitor the tax risks in the Group and implement procedures to minimise or eliminate these risks; and
  • to effectively manage and utilise any existing tax assets for the benefit of the wider Group.

Ownership and governance

The day-to-day compliance with all tax requirements rest with the Finance teams in each territory headed by the Chief Financial Officer and the Group Financial Controller. Each team is led by qualified professionals with adequate experience and training.

The Group also falls under the Senior Accounting Officer (SAO) regime where the SAO has oversight over the tax accounting arrangements in place supported by a robust internal control framework. An annual review of the processes and procedures in place is undertaken to comply with the requirements of preparing the SAO certificate.

Tax updates are provided to the Board of Directors and Audit Committee on a regular basis. Where tax decisions carry a material risk or relate to significant commercial transactions, these matters are presented in a Board meeting and decisions are undertaken taking into account an acceptable level of risk to the business but ensuring that this remains consistent with the Group’s tax objectives.

Attitude towards tax planning

The Group may engage in tax planning to structure its operations and finances but only when it is driven by a valid commercial or business purpose.

The Group has a low tolerance towards tax risk and does not undertake transactions based solely on tax planning purposes.

The Group obtains tax advice from reputable professional tax advisors in:

  • the normal course of our business;
  • the tax treatment of material or complex transactions;
  • transactions where a material uncertainty exists; and
  • where the Group does not possess the required expertise.

The Group also leverages from tax expertise available from our ultimate controlling party.

The approach in dealings with HMRC

The Group is strongly committed in maintaining a transparent and open relationship with the tax authorities. The Group engages with HMRC through our Customer Relationship Manager (CRM), where we provide all relevant information including that required for our annual Business Risk Review.

Where guidance is required, or specific clarification is needed for certain transactions, the Group engages with HMRC to obtain clearance before any action is undertaken.

Where significant uncertainty exists, or the transactions are complex, the Group arranges meetings with the tax authorities or where required, facilitates the communication between its tax advisors and HMRC.