CDW UK TAX STRATEGY
This document sets out CDW's policy and approach to its UK tax affairs and is intended to comply with the requirements of Schedule 19 of the Finance Act 2016. It applies to all companies forming part of CDW’s UK sub-group and applies to the year ended 31 December 2021. The companies within this group are subsidiaries of CDW Corporation, a US-based parent publicly traded on the NASDAQ stock exchange.
CDW's UK tax strategy forms part of the CDW group's wider corporate governance and reporting strategies and has been designed for compatibility with the 'CDW Way Code' which sets out the group's expected standards of ethics and behaviour for its coworkers.
The CDW UK group's approach to risk management and governance arrangements in relation to UK taxation
The CDW approach to tax risk management and tax governance is owned and endorsed by the UK Board of Directors and responsibility for its day-to-day implementation rests with the UK CFO with the support of the wider Finance function, including the Senior Accounting Officer (SAO) and UK Head of Tax.
CDW’s priority is to maintain robust and clearly documented internal business processes and controls with a view to minimising the risk of misreporting or error in its tax affairs. As part of CDW’s internal business process, the tax function is involved in or notified of business decisions regarding large or complex commercial deals. Any assessment of tax risk will be determined through professional due care and diligence so that decisions or judgments are made based on reasoned consideration. Some of the factors considered in reaching a conclusion are as follows:
- Legal and regulatory duties of directors and employees;
- Compliance with the CDW Way Code;
- Impact on the CDW brand and reputation;
- Cost-benefit analysis of the proposed tax treatment in terms of impact on financial performance set against any potential negative impact, economic or otherwise;
- Impact on future relationship with HMRC.
CDW always seeks to comply with all relevant laws, rules, regulations and compliance procedures required wherever it operates. Where considered appropriate, advice will be sought from external third party advisors to help facilitate the decisions made by CDW.
The attitude of CDW towards tax planning (so far as affecting UK taxation)
CDW’s approach to tax planning is conservative in nature and reflects the UK Board’s recognition of the importance of high standards of ethical behaviour throughout its business, an outlook shared by the wider CDW group as a whole. The UK Board of Directors is also cognisant of the negative publicity which can be generated by an aggressive approach to such affairs and how this would have a detrimental impact on the value and perception of the CDW name and brand.
CDW would never knowingly enter into any arrangement which could be considered as contrived or artificial. However, as part of a publicly listed organisation, CDW owes a duty to its shareholders to ensure that commercial transactions are arranged in such a way as to benefit from any legally available tax incentives or reliefs. CDW will seek to claim incentives or reliefs in the spirit or manner in which they are intended by the legislation.
The level of risk in relation to UK taxation that the group is prepared to accept
As noted above CDW’s position with respect to tax planning and risk management is generally to take a non-aggressive approach, aiming to comply with relevant tax law, rulings and case law. We believe that this approach is consistent with and has contributed to the ‘low risk’ tax rating that has been applied to the business by HMRC – a rating which has remained unchanged during the year. That said, the nature of operating in a complex and international business environment means that tax risk can never be fully eliminated. CDW seeks to balance tax risk by maintaining a vigilant and robust oversight of its tax reporting processes and by taking third party advice in areas of particular complexity. CDW’s target level of UK tax risk is also lowered by the group’s ongoing and consistent aim of filing all tax returns on a timely basis and engaging in an open and honest manner with HMRC.
The approach of CDW in its dealings with HMRC.
CDW engages with HMRC in an open, collaborative and transparent manner, with a view to ensuring that the group’s ‘low risk’ rating is maintained. CDW believes that such a relationship is beneficial to the business as a whole and minimises the risk of substantial tax disputes arising. The UK Head of Tax and SAO maintain regular dialogue with the group’s Customer Relationship Manager and this forms part of our ongoing commitment in this area. As noted above, the recent continuation of this rating by HMRC is tangible evidence that CDW’s approach to its relationship with HMRC is viewed positively in that regard.