Marex Group (‘Marex’ or ‘the Group’) is a leading independent global commodities brokerage group headquartered in the United Kingdom with a global network spanning North America and Asia.
The Group has an operational presence in many different tax jurisdictions where we contribute through various forms of direct taxation, including corporation tax, payroll taxes, withholding taxes, and stamp duties, as well as indirect taxes, such as Value Added Tax and sales taxes levied on our trade activities.
In recognition of the importance of complying with the worldwide taxation obligations of the Group and exercising appropriate tax risk management, Marex has invested significantly in expanding its Tax function in 2021. The Group has recruited an experienced Global Head of Tax in addition to a Corporate Manager and Indirect Tax Manager to work with and support the Head of Tax Reporting and Compliance
Under paragraph 16(2) of Schedule 19 of the Finance Act 2016 the Board of Directors are required to ensure that the Group’s Tax Policy for the current financial year is prepared and published on behalf of the Group. The CFO is then responsible for administering the policy and ensuring that the guiding principles laid down are adhered to. The CFO will report regularly to the Board of Directors (via the Audit and Compliance Committee) on the relevant tax matters as detailed within this policy.
The CFO delegates the daily management of the Group’s taxes to the Tax Department, but retains responsibility, as the Senior Accounting Officer, for the Group’s tax affairs. The Tax Department must perform these duties with consideration to, and in compliance with, the guidelines of this policy and report any concerns to the CFO on a timely basis.
Guiding Principles / Policy
Marex operates in a highly regulated environment and our tax policy aims to reflect and support our business in complying with the rules and regulations in the jurisdictions in which the Group operates, whilst mitigating future tax risks in a timely and efficient way.
Marex recognises taxation as a consequence of doing profitable business in a jurisdiction. Marex has not, and will not, engage in artificial schemes to lower our corporate taxes and aim to maintain a low tax risk outlook.
The Group maintains a simple and transparent legal entity structure, and all Marex legal entities including branches have appropriate local substance including employees and office space. We will be compliant with the legislation within the countries in which its group companies operate. Whilst we may take advantage of legitimate business allowances, incentives and reliefs available in each jurisdiction (for example Research & Development tax credits), we also believe that, as a good corporate citizen, paying our fair share of tax is an important social responsibility.
Notwithstanding Marex’s low appetite for tax risk, it is recognised that the global financial services environment within which the Group operates in inherently complex due to the need to continually offer market leading financial products to our clients. Marex achieves this goal by creating new and innovative products, expanding its customer base (including geographically) and making strategic acquisitions amongst others. This activity and the resulting business change increases the inherent tax risk within the business and the mandate of Group Tax is to manage this effectively. The firm’s framework for risk governance includes taxation, and key mitigants to the inherent business risk are as follows:
- The Group Tax team members have significant UK and international financial services tax experience acquired both in industry at banks, brokers and insurance companies, and in practice, for example in the specialist financial services tax teams of the Big 4.
- The Global Head of Tax is a full member of the Marex Business Change Approval Committee. This committee is chaired by the CFO and governs all material business change within the group. Group Tax is required to confirm its review for all submissions, and actively approve any items with a tax impact. This committee ensures that Group Tax is made aware of all significant business change items such as new products, new business partnerships and plans to open new branches or legal entities. Group Tax then works with the business, and where appropriate with external advisors to assess tax impacts. The proposed business change is not able to proceed without Group Tax review and approval.
- Group Tax works closely with the Group strategy and legal teams on any proposed strategic acquisitions to ensure that appropriate tax due diligence is undertaken. As required, Group Tax is supported by external legal counsel to ensure, amongst other things that the Group is appropriately protected from pre-acquisition tax risks.
The Marex ‘Transfer Pricing Policy’ will follow the Organisation for Economic Co-operation and Development (‘OECD’) guidelines and will be under ongoing review as part of the business change process to ensure we are following best practice and maintain adherence to OECD principals and guidance. The Group is proposing to commence a full transfer pricing refresh before the year-end 2021 to further strengthen our tax risk controls in this important area.
Relationship with Tax Authorities
Marex has a professional and transparent relationship with tax authorities in all jurisdictions / countries in which we operate and will always endeavour to respond promptly to any queries or concerns that they may have.
In the United Kingdom, the Group maintains an open line of communication with HM Revenue & Customs (‘HMRC’) on all tax matters. Group Tax meets with HMRC on an annual basis to discuss the business activities of the past 12 months and any particular taxation impacts. In addition, any tax risks identified and the tax governance procedures in place are reviewed with our Customer Compliance Manager. On the basis of these discussions and the UK tax returns submitted to date, Marex has been allocated a ‘low’ risk rating which Group Tax work continually towards maintaining. Between these meetings, Group Tax will liaise with HMRC as appropriate including for any items of tax uncertainty or where any errors in prior submissions are identified. Should any errors be identified, HMRC are promptly notified and Group Tax works to quickly assess the impact and pay any additional taxes due without delay.
Outside the UK, Marex uses a wide network of external tax advisors, as necessary, to assist Group Tax in managing and controlling our worldwide compliance obligations in line with best practice. This external support is managed by Group Tax from the UK where a central log of all filing deadlines is maintained as a risk control measure.
Where Marex has uncertain tax positions, or potentially contentious tax issues, professional advice will be obtained and an open dialog with the relevant authorities maintained to ensure that we comply with our statutory obligations.
All tax returns will be prepared and filed on a timely basis. In the rare event that any filing is late, we will communicate with the authorities as soon as practicable. We will investigate the reason for any late filing and ensure the correct resources are allocated and processes are improved to prevent the issue recurring.
All tax payments will be made on a timely basis in line with our obligations and requests for refunds will be made where overpayments arise to minimise any impact on the Group’s cash flow.
Information systems and controls
The CFO will implement and monitor the necessary accounting policies, procedures and processes to ensure a robust system of internal control exists in respect of the accounting and finance functions of the Group.
Standard accounting processes will be automated, where possible, for efficiency and to reduce risks of human error in processing large volumes of data.
The Legal Entity Control (‘LEC’) team will prepare monthly financial management review packs for each entity which are overseen by the Head of Finance to assist the CFO in monitoring and controlling the group’s financial ledgers. These reports contain detailed analysis of the business, including taxation matters, which enable the CFO to monitor performance in line with the requirements of this policy. The LEC team will prepare annual financial statements that are subject to external statutory audit. All provisions for taxes will be made in line with best practice to allow for accurate calculations of payments on account, where due, and all provisions will be disclosed in line with relevant accounting standards. Group Tax is currently implementing OneSource for tax provisioning in order to add additional tax risk control and audit trails to the current provisioning process. Implementation should be finalised in time for the 2021 year end.
The UK VAT group operates a Partial Exemption Special Method (‘PESM’) due to certain VAT exempt activities within the VAT Group. Any changes to the UK group’s business activity will be monitored by the CFO, Global Head of Tax and Head of Tax Reporting and Compliance to ensure the agreed methodology is still relevant and being applied correctly. External advisors may be used to assist in reviewing, maintaining and requesting amendments to the agreed methodology where necessary to reflect the UK group’s ongoing business activity.
The Tax Department prepare a monthly provision for irrecoverable VAT. The provision uses the same basis as the methodology used in the quarterly and annual VAT Returns and this is used by the Head of Tax Reporting and Compliance to monitor the operation of the PESM.
Monthly current and deferred taxation provisions will be prepared by the Tax Department once the LEC team have confirmed the accounting period has closed. As a result of the expansion of the Tax Department, tax entries are now posted to the general ledger by the Corporate Tax Manager and Indirect Tax Manager once the relevant journals have been reviewed and approved by the Head of Tax Reporting and Compliance.
All tax returns and payments are to be reviewed by the Head of Tax Reporting and Compliance and Global Head of Tax prior to submission. All Tax payments must additionally be approved by the Head of Finance or CFO prior to payment being made.
The Global Head of Tax will have regular meetings with the CFO to discuss any tax issues as they arise and both will work closely together to ensure the Group remains compliant with the Marex tax policy.
Review of Marex Spectron Group Tax Policy
The above guiding principles / policy will be reviewed on a regular basis and any changes will be approved by the Board of Directors prior to publication and implementation.
This Group Tax Policy was approved by the Board of Marex Spectron Group Limited on 23 September 2021.