Fern Group Tax Strategy

For Accounting Year Ending 30 June 2024

Introduction and our approach to taxation

Fern Trading Ltd (“the Company”) together with its subsidiaries (“the Group”) publishes this strategy in accordance with its duty under paragraph 16(2) of Schedule 19 to the Finance Act 2016.

The Group is a highly diversified business which is active across five core sectors, property, healthcare, house building, energy and fibre broadband.  It generates income both by lending to businesses in these sectors and through its operating businesses.

Ultimate responsibility for the Group’s tax strategy is with the Board of the Company (“the Board”).  The Board do not consider the Group to have complex tax arrangements.  The Group is a responsible taxpayer committed to paying its tax liabilities in accordance with the letter and intention of the law.  The Board’s approach to taxation is to ensure that the Group has appropriate arrangements in place to maintain this position, as set out below.

Tax risk management and governance

The Group is exposed primarily to Corporation Tax, Value Added Tax (“VAT”) and payroll taxes.  The Group does not have complex tax arrangements, and as such tax risks are largely limited to the risk of compliance or reporting errors.       

To mitigate these risks the Group engages reputable external advisors to provide some tax compliance and advisory services.  Additionally, the Group’s governance activities, including some tax oversight, are outsourced to a management services provider (Octopus Investments Ltd (“OI”), who employ a number of finance professionals and tax specialists who are engaged in providing tax services as part of the overall management service.  

Tax work outsourced to external advisors includes preparation tax information for statutory accounts, tax computations and filings and advising on tax payments.  VAT compliance is carried out internally by suitably qualified and trained finance personnel, overseen by a specialist tax manager.  

Tax planning and attitude to tax risk

The Group’s business model and operating structure is straight forward and not subject to significant judgement in the application of tax legislation.  The Group is run in a cost effective and commercial manner and to this end will make use of appropriate, legislated tax incentives, but only when aligned with underlying commercial objectives.  

External advisors are engaged on material transactions undertaken by the Group to ensure that transactions are structured efficiently for tax and that all tax implications are understood and correctly accounted for.  The Group does not engage in aggressive tax planning, neither will it seek to artificially manipulate or undermine the commercial reality of transactions to artificially reduce its tax liability.

As the appetite for tax risk across the Group is low, the Board do not consider it necessary to set a prescribed level of acceptable risk.

Relationship with HMRC

Consistent with the Group’s attitude to tax planning and appetite for tax risk, the Group always seeks to work with HMRC in an open, co-operative and transparent matter.

Where the Group employs advisors on a specific transaction or for compliance work the advisor may correspond with HMRC on behalf of the Group.  In such instances the Group will ensure transparency with the relevant advisor and all correspondence will be overseen by internal tax advisors.