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Tax Strategy

PSA Finance UK Limited – UK Taxation Strategy year ended 2021


PSA Finance UK Ltd (‘PSAF’) is a car finance company that offers a number of finance products to consumers. This includes Hire Purchase (“HP”) and Personal Contract Purchase (“PCP”) agreements. The Company also provides stock finance facilities to its dealer network.

This document sets out the policy and approach of PSA Finance UK Ltd to conducting its tax affairs and dealing with tax risk. This document has been approved by the Board of Directors.

We will comply with all our tax obligations, making appropriate returns and payments in a timely and responsible manner.

Level of Tax Risk 

We aim to minimise the level of risk in relation to UK taxation. We are not prepared to accept a level of risk that exposes us to reputational harm or which could adversely impact our relationship with HMRC.

Tax Risk Management

We define tax risk as the risk of non-compliance with domestic and international tax regulations due to either incorrect interpretation of legislation, regulations or guidance, or inaccurate or late reporting, which could lead to financial penalties, additional tax charges or reputational damage.

Tax risk is mitigated by:

  • Ensuring that our internal governance in relation to all tax matters is appropriate and relevant; and
  • Ensuring that we comply with all applicable tax laws and regulations.

We operate a low risk tax strategy and deliver accurate and timely tax information. The Head of Accounting and Tax at PSA Finance UK Ltd reports to the Chief Financial Officer (CFO) who is also the nominated Senior Accounting Officer for the company. The Company’s Legal and Tax Committee, which comprises several Board Directors together with the Head of Accounting and Tax, and the CFO, meets on a quarterly basis to discuss tax matters.

The Head of Accounting and Tax aims to review, prior to contracting/inception, all significant potentially contentious or complex transactions for compliance with all applicable tax laws and regulations. This review is completed at an appropriate level to provide the relevant tax expertise and challenge.

Where the outcome of the review undertaken by the Head of Accounting and Tax does not result in a conclusive tax treatment, written advice evidencing the facts, risks and conclusions will be sought from the Company’s external tax advisors. We will also consult with HMRC where the tax treatment of a transaction may be uncertain or contrary to the intentions of Parliament.

We deal with Banco Santander and PSA Group companies in the ordinary course of business. We do this where we have a particular commercial advantage or expertise, and where they can offer us commercial opportunities. In undertaking these transactions we respect the regulations on transfer pricing.

Tax Planning

We consider it important for us to maintain a competitive position and to continue to be innovative in both our funding and the products and services we provide to our customers.

To facilitate this, we may enter into tax planning whilst adhering to the following general principles:

  • Any tax planning must support genuine commercial activity.
  • The tax results it produces should be consistent with the underlying economics of the arrangements; or if not the tax results it produces are not contrary to the intentions of Parliament.
  • Rejection of any transactions or business activities that are clearly artificial or which serve no economic purpose other than tax avoidance.
  • Rejection of any tax planning that we consider to be aggressive.
  • Rejection of the use of structures or special purpose vehicles via tax havens or jurisdictions that do not cooperate with the tax authorities which are designed with the purpose of preventing the tax authorities from knowing the party ultimately responsible for the respective activities.


The Board delegates responsibility for our business activities and managing risk on a day-to-day basis to the Chief Executive Officer (CEO). The CEO is responsible for ensuring that we have a suitable system of controls to manage risk.

The CFO reports to the CEO and is head of the Financial Accounting & Control Division. The CFO has ultimate responsibility for the tax strategy, policies and management of tax risk, with day-to-day responsibility for the operation of these functions resting with the Head of Accounting and Tax.

The tax matters are managed with the support of a team of tax specialists from our external advisors under a Service Level Agreement concluded with PSA Finance UK Ltd. The CFO and the Head of Accounting and Tax receive regular updates on tax matters and report our tax position regularly to the Legal and Tax Committee.

Relationship with Tax Authorities

We maintain an open, professional and transparent relationship with HMRC with whom we engage in a co-operative, supportive and professional manner in all interactions.

We are open in our discussions with tax authorities and, in particular, aim to establish a clear “no surprises” relationship with both our Customer Relationship Manager (CRM) at HMRC and HMRC more generally. We maintain regular dialogue with our CRM, in which we discuss current, past and future taxation matters and business transactions. We will also consult with HMRC where the tax treatment of a transaction may be contrary to the intentions of Parliament.

We support government and HMRC initiatives to modernise the UK tax system and to improve tax transparency.

Finance Act 2016

This document is considered to comply with the requirements of Schedule 19 of Finance Act 2016.