Introduction

The Society was born with a social purpose, rooted in the belief that we achieve more together than we can alone. We want to use the power of mutuality as a force for good for our members, and for society; we describe this as building society, nationwide.

Our mutuality informs how we behave, from the products and services we offer our members and customers, to how we treat our employees. We are owned by our members and our goal is not to maximise profit. Rather we aim to make sufficient profit, ensuring the right balance between financial strength and delivery of member financial benefit, mainly through product pricing.

It also requires us to consider the taxes paid and collected on our business operations as an important part of the economic and social contribution we make to the wider society that we serve. This governs our approach to, and interactions with, tax authorities. As a result, the Society strives to pay the right amount of tax in accordance with legal requirements and consistent with our strong commitment to social responsibility.

We define tax risk as the failure to pay the right amount of tax at the right time. The Society’s Tax Management function identifies and monitors tax risks and uncertain tax positions arising from Nationwide’s business operations and manages their resolution.

The Society engages the services of external tax advisers where specialist expertise is required which the team of in-house tax professionals do not have, or where external assurance is considered necessary on an issue in which there is significant tax risk or legal uncertainty.

We aim to be recognised as a low risk and compliant business by HMRC and every tax authority with which we engage. We do not set a prescribed target for the level of tax risk we are prepared to accept nor do we set the attainment of a specified effective tax rate as a business objective.

The Society has adopted the Code of Practice on Taxation for Banks (“The Code”). The Society will only undertake tax planning that supports genuine commercial activity and which, in the opinion of the Society’s Tax Management function, is consistent with the intentions of Parliament when relevant laws were enacted. The Society will not undertake tax planning which we consider is likely to damage our business reputation or is not considered consistent with our mutual values. The Society will not engage in, facilitate or promote tax arrangements to third parties that we consider are contrary to the intentions of Parliament. 

The Society is owned by its members and we will put our members’ interests first by realising entitlement to legitimate tax reliefs and allowances and by looking to mitigate tax costs arising on transactions entered into in the ordinary course of business.

Accountability for tax strategy and policy rests with the Society’s Board of Directors. The Chief Financial Officer is the Senior Accounting Officer as defined in Schedule 46 Finance Act 2009 and has personal responsibility to ensure we have appropriate systems, processes and people to ensure Nationwide produces tax returns which calculate tax liabilities accurately. 

The Board and the Chief Financial Officer delegate authority to the Head of Tax Management, who leads a department of in-house tax specialists, to manage the Society’s tax affairs. This includes the responsibility to ensure the Society complies with all tax obligations and that any tax planning undertaken is consistent with our business strategy, the requirements of the Code and with this policy. 

An Executive Tax Summary, including performance against key tax management indicators and commentary on the management of tax risks, is sent to the Chief Financial Officer quarterly. Significant new tax issues are escalated to and discussed with the Chief Financial Officer as they arise.

A paper is presented annually to the Audit Committee containing commentary on significant tax issues and risks.

We consider that tax authorities, and particularly HMRC in the UK, are important external stakeholders in our business. 

We believe we have developed a relationship of trust with HMRC in which we adopt an open and transparent approach to promote cooperative compliance. We are proactive in highlighting uncertainties in tax law to HMRC in relation to our business transactions and endeavour to agree these uncertainties with HMRC in real time before the relevant return is due. We initiate regular meetings to inform HMRC of key developments and initiatives in our business and to anticipate any tax issues which will arise.

If all other methods of dispute resolution with the tax authorities have been exhausted, and if the Board considers the issue is of sufficient importance to the interests of our membership, we will use the court process to resolve the matter. Such instances are rare.

To comply with the US Financial Account Tax Compliance Act (FATCA) and the OECD Common Reporting Standard, the Society has continued to invest in systems to put in place procedures to facilitate the reporting of customer account information by HMRC to the appropriate non-UK tax authority. In doing so, we aim to minimise any disruption in the Society’s customer experience at the time of their opening an account.

The Society does not tolerate activities which facilitate tax evasion in either the UK or abroad and are criminal offences. We are committed to preventing the facilitation of tax evasion by associated individuals or businesses anywhere within our business operations. We do this by developing prevention procedures, carrying out regular due diligence and risk assessments of our operations and promoting awareness through training programmes and a culture of compliance throughout the Society.

The publication of this document complies with the requirements of Schedule 19 Finance Act 2016.