Tax Governance and Control Framework
Our Board has overall responsibility for risk management and the systems of internal control. The Group Chief Financial Officer is the executive responsible for ensuring that we comply with all applicable laws, rules and regulations associated with tax compliance.
We have a quarterly risk governance process in place which identifies the nature, extent and financial implication of risks we face including tax risks and also assessing our ability to manage and mitigate risks that may occur through putting appropriate controls and actions in place and also reports the Group risk profile to the Ervia Group Risk Management Committee and onwards to our Board and the Audit and Risk Committee of the Ervia Board.
Across the Ervia Group, fraud, bribery and corruption are not tolerated and it is each employee’s responsibility to report any suspected acts of fraud, bribery or corruption or suspicious behaviour they encounter, this would include any tax concerns that are identified.
There is a Group wide integrity-based initiative, ‘Doing the Right Thing’ which promotes the integrity value and emphasises the importance of ethical behaviour. As part of the initiative, guidance booklets are issued to employees on key ethics related policies with annual training updates and quarterly team integrity conversations.
The internal control environment includes internal policies requiring all employees to act with integrity and maintain the highest ethical standards. These polices include the Code of Business Conduct, Anti- Fraud policy, Anti-Bribery and Anti-Corruption policy, Lobbying policy and Protected Disclosures policy. It also includes a comprehensive anti-fraud programme including anti-fraud policy, training and communication and a fraud response plan.
Management of Tax Compliance
The following principles are applied to maintain and improve tax compliance:
- Hiring of tax and accounting qualified personnel to manage the tax obligations of the company
- Paying the right amount of tax and filing all necessary tax returns based on the tax laws, rules and regulations. These returns and payments will be made in full and on time
- Maintaining segregation of duties to ensure the preparation and review steps in filing all tax returns are completed independently
- Training and support provided to all non-tax qualified personnel with responsibilities for tax required information to ensure that they have the skills, technical expertise and knowledge to effectively and accurately fulfil their tax responsibilities and perform to the best of their abilities
- Ensuring key risk areas are monitored and material risks minimised by adhering to strict controls to ensure material compliance with all applicable tax laws, rules and regulations
- Engaging with the tax authorities and / or procuring the support of tax accounting firms where legislation is unclear or is subject to interpretation
Following the review of the Group’s annual corporation and deferred tax workings the auditor issues a letter of compliance confirming the tax charges are materially correct and that statutory obligations of timely filing of corporation tax returns have been fulfilled.
The financial note detailing our tax expense for 2020 can be found in Note 9 of the overall Gas Networks Ireland Annual Report.
Relationships with Tax Authorities
We have an open and transparent relationship with all tax authorities, working to maintain and improve good tax corporate governance. We have signed up to the Co-operative Compliance Framework (CCF) with Irish Revenue.
The CCF is designed to promote open communication between Irish Revenue and larger taxpayers, reflecting the mutual interest in being accurate about tax liabilities. This provides for a relationship based on trust and cooperation between Irish Revenue and large businesses where both parties work together to achieve the highest possible level of tax compliance.
Financial Assistance received
To support the development of our capital investment programme we apply for grant funding where applicable. The following grants were received from the Innovation and Networks Executive Agency in 2020:
- €7.1m was received to assist with the funding of the twinning project (a 50km section of pipeline twinning the South West Scotland onshore pipeline to improve security of supply).
- A further €0.8m was received for the development of the CNG network under the Causeway and Green Connect schemes.
- A grant for €0.1m in relation to the development of policies, procedures and training within IT.