Our approach to tax
At Schroders we are committed to conducting our tax affairs in an open and transparent way. This means that we comply with all of our tax filing, tax reporting and tax payment obligations globally. We also seek to maintain good relationships with the tax authorities in the key jurisdictions in which we operate.
The amount of tax we pay and collect is driven by a number of factors including the locations of our people and clients, and the tax rates and rules in each of the countries in which we operate. Corporate tax rates in particular can vary significantly by country. With this in mind, we apply a consistent global approach to allocating costs and revenues that fairly recognises the economic contribution of each of our businesses.
We believe it is important that business behaves responsibly and builds trust within society regarding its role and contribution on tax. With this in mind, we support initiatives to improve international transparency on taxation matters, including OECD measures on country-by-country reporting and automatic exchange of information. We are a signatory to the UK's Code of Practice on Taxation for Banks and are treated as 'low risk' by HMRC.
Our tax strategy sets out our approach to tax matters across the Group more generally. This strategy is reviewed and approved annually by the Audit and Risk Committee.
We have offices in 34 countries including the major financial centres of Europe, the Americas and Asia Pacific. Taxes borne include corporate income taxes, employer related social security, business rates, irrecoverable value added taxes on our expenses and sales taxes.
On average, we pay corporate income tax at a rate of 20.6% (2018: 22.3%). Please see Note 5 of the 2019 Annual Report on page 126 for further information.
The total taxes borne by the Group in 2019 was £245.7 million (2018: £253.1 million).
Companies also have an important role in collecting and administering taxes on behalf of governments, where the cost of the tax is borne by others. We collect income taxes, social security, withholding taxes, indirect taxes and other local taxes in the countries in which we have operations.
The total tax collected in 2019 was £244.4 million (2018: £223.0 million).
|Corporate income taxes borne||45.3||4.3||31.7||46.1||127.4|
|Employment taxes borne||56.5||4.3||6.0||16.8||83.7|
|Indirect taxes borne||15.4||0.2||1.7||7.0||24.4|
|Property and other taxes borne||8.0||0.9||1.2||0.1||10.3|
|Total taxes borne||125.2||9.7||40.7||70.1||245.7|
|Employment taxes collected||168.5||31.2||20.7||11.6||232.1|
|Indirect taxes collected||-7.8||0.1||13.3||6.0||11.5|
|Withholding and other taxes collected||0.0||0.4||0.3||0.2||0.8|
|Total taxes collected||160.6||31.7||34.3||17.8||244.4|
|Total taxes borne and collected||285.9||41.4||75.0||87.9||490.1|
We are required by law to disclose tax information in our annual report and in respect of certain regulated entities (see below).
Capital Requirements (Country-by-Country Reporting) Regulations 2013