Tax strategy

For the year ending 31 December 2023

Handelsbanken plc (hereafter ‘Handelsbanken’ or ‘the Bank’) recognises that its success derives from the trust it enjoys from its customers, counterparties, employees, investors, public authorities and the public in general. It also understands how taxation plays a key role and contributes to a sustainable development of society. Ethical, moral, and sustainable conduct in relation to tax matters, are therefore vital. 

The Bank’s policies on Tax, Ethical Standards and Sustainability govern the Bank’s attitude towards tax risk management, tax planning, professional conduct and best practice when working with tax authorities. They also form the basis of this Tax Strategy which summarises Handelsbanken and its UK subsidiaries’ approach to conducting its own tax affairs and dealing with associated tax related risks. 

The Strategy is reviewed and approved by the Handelsbanken board an annual basis and the Bank regards its publication as complying with its obligations under paragraph 19(2) Schedule 19 Finance Act 2016.

Tax related risks

Handelsbanken has a low risk tolerance and this also applies to tax related matters. The key tax risks linked to the Bank’s business operations are assessed to be:-

  • Compliance risk - failure to submit timely and accurate returns or make payments to the tax authorities resulting in financial sanctions and/or reputational damage.
  • Operational risk - failure in internal processes, systems or people resulting in unexpected tax costs, damages or reputational damage.
  • Transactional risk - failure to adequately consider or control tax consequences of transactions entered into by the Bank, resulting in financial losses and/or reputational damage.
  • Reputational risk - failure to comply with the Bank’s standards, resulting in a deterioration of its standing with customers, tax authorities, shareholders and the general public.

The Bank seeks to minimise and manage these risks through the implementation of its Tax Governance Framework, the use of qualified in-house tax specialists, robust internal control and review processes, and engaging with external advisors where required. It monitors changes in the tax landscape and will update or amend its controls as required.

Tax risk governance

The Board of Handelsbanken holds ultimate responsibility for ensuring that tax related risks are managed effectively. Its tax risk tolerances, which articulate the level and type of risks the Bank is prepared to tolerate in pursuing it business objectives, are set out in the Tax, Ethical Standards, and Sustainability policies and managed through the Bank’s Tax Governance Framework. 

The Bank applies a general ‘three lines of defence’ approach to risk management across the organisation. This also includes tax related risks and under the Tax Governance Framework, key roles, accountability and responsibilities are clearly assigned. As tax related risks may be found in numerous business areas, various departments within the Bank act as the first line of defence. Oversight and independent challenge is provided by the Bank’s 2nd Line of Defence and tax functions, and additional assurance (3rd Line of Defence) is supplied by the Bank’s Internal Audit Department, which carries out independent assessment of how key risks are being managed.

The Bank’s in-house tax function is staffed by appropriately qualified tax professionals and where significant risks are identified, these are reported and/or escalated by the Chief Tax Officer to the Chief Financial Officer and/or the Board Audit Committee.

Tax compliance and transparency

The Bank shall (at all times) endeavour to act in accordance with all applicable tax laws and regulations, and to be guided by prevailing international agreements/standards dealing with tax related matters. This applies to both intra-group and business transactions with external parties, and to all products and services provided by the Bank.

The Bank supports international efforts towards greater tax transparency and discloses its earnings and UK tax payments in the country-by-country report prepared and submitted by its parent company, Svenska Handelsbanken AB.

Attitude towards tax planning

The Bank holds a conservative view towards tax planning. When providing products or services, or carrying out transactions, the Bank’s corporate social and ethical responsibilities (as set out in its Tax, Ethical Standards, and Sustainability policies) are always considered.

In relation to its own tax affairs, the Bank does not undertake transactions which, contrary to established tax practice, are designed to achieve tax results that circumvent or exploit gaps, mismatches, or disparities in tax legislations or international tax systems. All planning undertaken by the Bank supports genuine commercial activity, complies with both the spirit as well as the letter of the law and is in accordance with both the Bank’s corporate responsibilities and the HMRC Code of Practice on Taxation for Banks.

When working with its customers the Bank does not advise, promote or offer products or services designed to facilitate abusive tax avoidance or aggressive tax planning. Tax advantageous products, such as Individual Savings Accounts (‘ISAs’), are structured in accordance with the intentions of Parliament and/or established tax practice.

Customer tax advisory services

In the UK, tax advice and tax compliance services may only be provided by Handelsbanken’s subsidiary, Handelsbanken Wealth & Asset Management Ltd.

Relations with HM Revenue and Customs (HMRC)

In the UK, Handelsbanken has adopted and complies with HMRC’s Code of Practice on Taxation for Banks. In its dealings with HMRC and other tax authorities it seeks to be proactive, transparent and professional. Regular dialogue is maintained with the Bank’s HMRC Customer Compliance Manager to ensure any significant issues or uncertainties in relation to tax are discussed on a timely basis and that associated tax risks are minimised as much as possible.