The following description of Formula 1’s Tax Strategy applies for the financial year ended 31 December 2020 and is provided in compliance with the requirements of Schedule 19 of Finance Act 2016. References to “Formula 1” herein are to Liberty GR Holding Company Limited and its subsidiaries.
1. Tax Governance
Responsibility for tax, including in particular the management of tax risk, the development of tax strategy, and implementation and monitoring of the related governance framework, rests with Formula 1’s Chief Financial Officer (CFO), with Formula 1’s Director of Tax having day-to-day responsibility for all tax-related matters, supported by a small team of professionally-qualified personnel.
The CFO reports on tax, as well as other matters, to the Board of Formula One Topco Limited and to its Audit and Ethics Committee, which are the key governance bodies of Formula 1. The CFO’s reports cover key tax developments, risks and issues for consideration by those bodies.
2. Tax compliance and tax authority relationships
Formula 1 seeks to comply in full with its tax filing, tax reporting and tax payment obligations globally.
Formula 1 seeks to establish and to maintain open and transparent relationships with the tax authorities in the key jurisdictions in which it operates, and often seeks advance discussions with those tax authorities with a view to obtaining, where possible, advance agreement and certainty regarding the tax treatment of key business activities.
Formula 1 engages fully with HMRC through its HMRC Customer Compliance Manager (‘CCM’), and discusses developments in its business, and connected tax matters, with HMRC in real-time.
In any international business it is inevitable that from time to time the views of Formula 1 will differ from those of the relevant tax authorities with regard to the interpretation and application of tax rules, legislation, and treaties, all of which are complex areas. Where disputes arise, Formula 1’s preference is to resolve them through negotiation and discussion with tax authorities where possible, but the Group may litigate matters where it feels that such a course of action is necessary.
3. Tax planning and level of risk
Formula 1 conducts all of its tax matters fully in accordance with the applicable law and, in common with other businesses and consistent with its responsibilities to its shareholders, seeks to structure its business and operations to maximise tax efficiency, acting at all times within the relevant legal and regulatory frameworks.
Formula 1 does not engage in high-risk tax planning, and seeks discussion with HMRC on a real-time basis with regard to significant or complex matters with a potential to impact Formula 1’s UK tax position. In particularly complex areas, or where there is significant uncertainty in how the applicable legislation and guidance is to be interpreted, Formula 1 takes advice from leading legal and professional advisory firms.