UK tax strategy

This explains our tax strategy and how we manage our tax affairs.

UK tax strategy

This tax strategy applies to the UK affiliates of Kainos Group Plc (the ‘Group’ or ‘Kainos’ for the financial year ended 31 March 2023). These entities regard this policy as complying with their duty in accordance with paragraph 16(2) of Schedule 19 Finance Act 2016.

This strategy was approved by the board of Kainos Group plc (“the Board”) on 31 March 2022. Any subsequent amendments will also be approved by the Board.

Commitment to Tax Transparency and Ethical Transparency

Kainos is committed to the Organisation for Economic Cooperation and Development’s (“OECD’s”) initiatives on tax transparency, including the principles of recognising income and paying taxes in the countries where activities are undertaken. We actively manage our liabilities across all taxes in the UK and overseas, in a manner that is consistent with our values, our corporate and social responsibilities, and which reflects the commercial operations of our business.

This commitment is embedded in the way we conduct our tax affairs. Kainos complies with all tax laws and regulations, reporting and disclosure requirements in a timely fashion, and we maintain candid and transparent relationships with tax authorities globally based on regular collaboration. We recognise that tax situations can be very complex and making the right decisions requires careful consideration of many factors.

Tax Compliance

Kainos are committed to ensuring full compliance with our tax obligations and paying the right amount of tax at the right time. The Group’s policy is to comply with all relevant laws, rules, regulations, reporting and disclosure requirements and to pay the amounts of tax legally due.

Managing UK tax risks and control environment

Ultimate responsibility for the Group’s tax strategy and compliance sits with the Board. Executive management of the tax affairs of the Group is delegated to the Chief Financial Officer (“CFO”). The day-to-day responsibility for managing tax affairs sits with the Group’s in- house tax team, who report to the Group Head of Finance. The tax team consists of qualified and experienced tax specialists who participate in ongoing training as required. The CFO reports to the Audit Committee and the Board on the UK Group’s tax affairs and risks during the year.

Our commitment to Tax Risk Management

The Group operates a process of tax risk assessment which is supported by internal controls and ensures that reasonable care is applied in relation to all processes which could have a material impact on compliance with its tax obligations.

Tax advice is sought from external advisers where appropriate and where, for example, the tax team does not have the expertise required in a particular area. Our corporation tax returns are prepared by external tax advisors and are reviewed by our in-house tax team prior to submission to HMRC. At no time will we enter into arrangements which reduce our tax liabilities that are considered aggressive or contrived.

Our attitude to tax planning and risk

The Group takes a low risk approach to tax planning and seeks to obtain this through;

  • Paying the right amount of tax on time;
  • Submitting all tax returns on a timely basis; and
  • Ensuring that tax returns include sufficient detail to enable the tax authorities to form an accurate view of the affairs of the company filing the return with an adequate supporting audit trail and sign-off process.

For the year ended 31 March 2021, Kainos had a total corporation tax expense of £10.7m with profit before tax of £50.3m (an effective tax rate of 21%).

Our commitment to a transparent relationship with Tax Authorities

Kainos is committed to maintaining an open and transparent relationship with the tax authorities in the jurisdictions in which we operate. Where appropriate we endeavour to engage with HMRC / other tax authorities as soon as possible in any areas of material uncertainty, so as to minimise our tax risk and to provide greater certainty for both parties in advance of formal tax filings.

List of UK entities covered by this strategy:

  • Kainos Group Plc
  • Kainos Software Limited
  • Kainos Worksmart Limited
  • Formulate Kainos Limited
  • Kainos Evolve Limited
  • Kainos Manager Limited
  • Kainos Trustees Limited