STERIS plc Group Tax Strategy

March 2019

This document, approved by the board of STERIS plc, sets out the Group's approach to conducting its tax affairs and dealing with tax risks.

Tax principles

The STERIS plc group (the "Group") is committed to the following underlying tax principles:

  • The Group follows all applicable tax laws and regulations in the jurisdictions in which it operates;
  • The Group's tax activities follow and reflect the commercial activities of the business with the levels of tax paid appropriate to the jurisdictions where the Group has commercial substance and associated profit generation;
  • Due care and diligence is provided in our management of relevant processes, controls and procedures to ensure that our tax governance is appropriate;
  • The Group has a low tolerance to tax risk and aims to maintain a positive and transparent relationship with the relevant tax authorities within each jurisdiction in which the group operates based on a proactive approach, with the aim of obtaining certainty over the Group's tax position;
  • The Group considers all relevant costs of the business, including tax. This includes using incentives and reliefs to minimize the tax cost of conducting our business while ensuring that these incentives and reliefs are not used for purposes which are knowingly contradictory to the intent of relevant legislation.

Risk management

Managing the Group's tax affairs is a complicated process across many separate and autonomous businesses and across multiple jurisdictions over five continents. As such there will inevitably be risks associated with ensuring the appropriate taxes are calculated, collected and settled in a timely manner in accordance with each one of the areas in which the Group operates. Although it is not possible to entirely eliminate tax risks, the Group's attitude towards the level of control required over tax processes is designed to reduce these tax risks and be proportionate to the perceived likelihood of occurrence and scale of impact of each risk.

Identified tax risks are assessed on a case-by-case basis to ensure each individual risk is managed appropriately. Where there is uncertainty in respect of a specific risk, the Group will consider whether to seek external advice to support the Group's evaluation of the risk or discuss with the relevant tax authority.

When considering a specific tax risk, the Group considers the following:

  • The maintenance of the Group's corporate reputation, having regard to the way the Group interacts with its stakeholders;
  • The requirements of any related internal policies or procedures; and
  • The legal and fiduciary duties of directors, executive officers, and employees.

Tax planning

The Group has defined lines of responsibility for its tax affairs, with decisions being taken in line with the Group's tax authority thresholds, ensuring that they are taken at an appropriate level.

The Group's tax planning aims to support the commercial needs of the business by ensuring that the companies' affairs are carried out in the most tax efficient manner while remaining compliant with all relevant laws. The tax function is therefore involved in the commercial decision-making processes and provides appropriate input into business proposals to ensure a clear understanding of the tax consequences of decisions made.

In cases where the tax guidance is unclear or the Group feels it does not have the necessary expert knowledge to assess the tax consequences adequately, external advice generally will be sought from the tax authorities or advisors to support the Group's decision-making process.

Approach towards dealings with HM Revenue & Customs ("HMRC")

The Group is committed to the principles of openness in its approach to dealing with HMRC, and the Group endeavors to:

  • Make fair, accurate and timely disclosure in correspondence and returns, and respond to queries and information requests in a timely fashion.
  • Seek to resolve issues with HMRC in a timely manner, and if disagreements arise work with HMRC to reach a resolution by agreement.
  • Be open and upfront with respect to decision-making, governance and tax planning.
  • Ensure that transactions are structured with the aim of creating a tax result which is not inconsistent with the economic consequences of the transaction (unless specific legislation designates that to be the appropriate result), nor contrary to the intentions of Parliament.
  • Interpret the relevant laws in a reasonable and appropriate way, and to ensure similar transactions are structured consistently.
  • Ensure all interactions with HMRC are conducted in an open, collaborative, constructive and professional manner.