Wealthsimple UK Limited

DATE OF PUBLICATION – 05 December 2023 relating to Financial Year 31 December 2023

UK Tax Strategy

Scope

This strategy applies to Wealthsimple UK Limited. It is a member of the Power Corporation of Canada Group (the Group).  

It is published in accordance with Schedule 19 of the Finance Act 2016 (the Schedule), as part of the duty imposed on Wealthsimple UK Limited to prepare and publish a UK Qualifying Company Tax Strategy under paragraph 22(2) of the Schedule in the current financial year ending 31 December 2023 and has been made available to be freely accessed by the public online.

The content of this document is relevant as at the date of publication and will be updated when necessary.

References to ‘UK Taxation’ are to the taxes and duties set out in paragraph 15(1) of the Schedule which include Income Tax, Corporation Tax, PAYE, NIC, VAT, Insurance Premium Tax, and Stamp Duty Land Tax, Stamp Duty and Customs & Excise Duties. References to ‘tax’, ‘taxes’ or ‘taxation’ are to UK taxation and to all corresponding worldwide taxes and similar duties in respect of which the Group has legal responsibilities.

Wealthsimple UK Limited: Approach to tax

Approach to tax risk management and governance

The approach of the Group in the UK to tax risk management and governance is to meet three key principles:

  • Compliance with all statutory arrangements

Wealthsimple UK Limited respects the law in the UK. This means that it complies with its legal obligations for tax, that it aims to file its tax returns on time with full and adequate disclosure of all relevant matters, and that it assesses and pays its taxes on time. 

Wealthsimple UK Limited does not take an aggressive approach to tax planning or compliance. This means that it will only undertake transactions that it is prepared to fully disclose and that it only undertakes transactions that have a strong underlying commercial motivation, and that are not artificial or contrived. 

Wealthsimple UK Limited conducts intragroup transactions on an arm’s length basis and complies with its obligations under transfer pricing rules in the UK.

  • Strong and robust governance at every level

The in-house tax department has responsibility for and implements Wealthsimple UK Limited’s Approach to Tax in the UK. They are also responsible for ensuring that policies and procedures that support the Group’s approach are in place, maintained and used consistently, and that the Finance team has the skills and experience to implement the approach appropriately.

The in-house tax department consists of two specialists with the Chartered Professional Accountant designation from Canada. The internal tax department engages with an external UK tax advisor, for all UK tax compliance matters. 

  • Minimising exposure to tax risk

As part of its risk management system, Wealthsimple UK Limited identifies, assesses and manages tax risks and accounts for them appropriately. It implements risk management measures including controls over compliance processes and monitors their effectiveness, with the aim of continual improvement.

Approach towards tax planning

  • Operational driven approach:

Wealthsimple UK Limited is established in the UK, and does not have any operations in any other jurisdictions. The company does not use different jurisdictions to gain a tax advantage or otherwise engage in artificial tax arrangements. 

Wealthsimple UK Limited adheres to relevant tax law and seeks to minimise the risk of uncertainty or disputes with local tax authorities. To that end, as part of its risk management process it seeks appropriate external tax advice to determine the appropriate application of rules.

Where tax incentives and/or exemptions are implemented by the UK and other governments in order to support investment, employment and economic development Wealthsimple UK Limited seeks to understand their impact and, if appropriate, applies them in the manner intended.

As an entity, Wealthsimple UK Limited is suitable for carrying on its business activities in the UK and for complying with the prevailing regulatory environment.

Wealthsimple UK is planning to wind-up the corporation in the near future, and therefore, there is no tax planning or tax strategy being contemplated ore executed at this time and will not be any until the wind-up. 

  • Global transparency:

Wealthsimple UK Limited’s management recognises that there is a demand from public opinion in the UK and elsewhere for greater tax transparency. They aim to address this through clear and informative tax disclosures in line with OECD (Base Erosion Profit Shifting, action 13) and EU (Shareholders’ Rights Directive) proposals. The ultimate parent company reports information relating to income taxes in its Country by Country filing Statement.

  • Responsibility to pay tax where profits arise:

Wealthsimple UK Limited’s business operations take place wholly within physical locations within the UK, and therefore the company pays taxes in the UK where its profits are earned.

Level of tax risk that Wealthsimple UK Limited is prepared to accept

In accordance with the Group’s Code of Ethics, the degree of tax risk allowed is minimal. The Group does not engage in operations likely to bear an identified tax risk, whatever the economic benefit at stake. Wealthsimple UK Limited abides by these Group policies. To that end, its finance team proactively evaluates, manages and monitors potential risks to ensure they are properly mitigated. Where a significant uncertainty or complexity arises, they seek external advice and liaise with HMRC where appropriate.

From time to time Wealthsimple UK Limited’s tax position may be challenged by HMRC, (potentially due to divergence of interpretation). In such a case, the finance team, together with their professional advisers, ensure that the company’s interest is protected in accordance with the relevant legislation, published guidance and external advice.

Over and above its compliance with UK tax law neither the Group nor Wealthsimple UK Limited undertakes activities the tax implications of which might lead to reputational damage in the areas of business, investment and public opinion.

The approach of Wealthsimple UK Limited to dealings with HMRC

Wealthsimple UK Limited seeks to build and sustain a constructive relationship with HMRC, based on mutual respect. It works collaboratively wherever possible with HMRC to resolve disputes and to achieve early dialogue and agreement for certainty purposes. It does its best to respond appropriately and on time to HMRC requests for information regarding transactions or business processes.