This statement is LifeArc’s UK tax strategy that is published to meet the requirements of the Finance Act 2016, Sch 19, Part 2, Para 22. The Strategy is for the financial year 2020 and was approved by the Board at their meeting on 16 March 2021.

Principal operations and document scope

LifeArc is a UK registered and self-funding charity that drives medical innovation through our own research and our work with a range of partners from industry, charities, universities, research organisations and others involved in improving lives for patients. Our approach to tax seeks to support this in a responsible and transparent manner.

As a charity, the principal taxes that LifeArc pays are VAT and payroll taxes. LifeArc is subject to general VAT rules, but qualifies for charity reliefs and exemptions. We are generally exempt from corporation and capital gains tax as our income gains are used for charitable purposes.

Governance and approach to risk management

Our tax strategy is monitored by the Audit and Risk Management Committee on behalf of the Board of Trustees, which has ultimate responsibility for the Charity’s tax affairs. Day-to-day responsibility for implementing the strategy rests with our Associate Director, Finance, who reports to the Chief Financial Officer. The Chief Financial Officer reports regularly to the Audit Committee on key aspects of compliance and on an ad hoc basis if the need arises. To meet our compliance obligations, the Associate Director, Finance, is supported by a Financial Controller and a Financial Accountant. The wider finance team contains three further qualified accountants, one of whom oversees our risk management function.

LifeArc actively seeks to identify, evaluate and manage all tax risks and implements controls and processes to ensure that risks are minimised. We are conscious of the impact of change, both in our activities and from HMRC regulation. We include management of change in our risk mitigation processes and where there may be significant uncertainty or complexity in relation to tax we engage external professional advice.

Attitude towards tax planning

LifeArc does not engage in aggressive tax planning, but will seek to utilise reliefs, incentives and where appropriate tax structures to minimise tax costs, but we will not consider entering into arrangements or arrive at interpretations which are contrived or artificially seek a tax advantage which is contrary to the intention of tax legislation. Any resulting savings are reinvested to further our charitable purposes. At all times we seek to identify, declare, and pay on a timely basis all amounts properly owing to HMRC.

The level of risk LifeArc is willing to accept in relation to UK taxation

Responsibility for the overall management of risk lies with the Board of Trustees. The Board determines the general risk appetite of the Charity in key areas, in line with our strategic priorities, and ensures an appropriate risk management framework is in place to seek to manage, as far as practicable, risks within this defined appetite. LifeArc’s risk management policy seeks to minimise, so far as practicable and at an appropriate cost, the possibility that our corporate objectives are not delivered. The goal is to manage risk to a level that is acceptable to the Board rather than seek to eliminate all risks. It is of utmost importance to us that we maintain our reputation with stakeholders and uphold high standards as a corporate citizen. Our approach to tax risk follows these policies and principles and will inevitably consider materiality, although we do not set defined limits on what is an acceptable risk.

Approach to working with HMRC

LifeArc seeks to engage in a transparent, honest and constructive relationship with HMRC in relation to all tax affairs. All dealings with HMRC are conducted in a professional manner and we aim to avoid unnecessary disputes with HMRC. Where necessary, formal or informal clearance will be sought from HMRC on uncertain tax positions and we endeavour to share all relevant information with HMRC. We will never knowingly conceal or knowingly misrepresent issues to HMRC. If we discover any errors, we will correct and where required we will report details to HMRC without unnecessary delay.