Fair Tax Mark Statement of Westmill Solar Co-operative Limited (February 2023)
This statement of Fair Tax compliance was compiled in partnership with the Fair Tax Foundation (“FTF”) and certifies that Westmill Solar Co-operative Limited (“the Society”) meets the standards and requirements of the FTF’s Solely UK-based Business Standard.
The Society is committed to paying all the taxes that we owe, in accordance with the spirit of all tax laws that apply to our operations. We believe that paying our taxes is the clearest indication we can give of being responsible participants in society.
We fulfil our commitment by seeking to pay the right amount of tax, at the right rate, in the right place and at the right time. We aim to do this by ensuring that we report our tax affairs in ways that reflect the economic reality of the transactions we actually undertake in the course of our trade.
We will never seek to use those options made available by tax law or the allowances and reliefs that it provides in ways that are contrary to the spirit of the law. Nor will we undertake specific transactions with the sole or main aim of securing tax advantages that would otherwise not be available to us, based on the reality of the trade that we undertake. As a result, the Society will never undertake transactions that would require notification to HM Revenue & Customs under the Disclosure of Tax Avoidance Schemes Regulations or participate in any arrangement to which it might be reasonably anticipated that the UK’s General Anti-Abuse Rule might apply.
We believe tax havens undermine the UK’s tax system. As a result, whilst we may trade with customers and suppliers genuinely located in places considered to be tax havens, we will not make use of those places to secure a tax advantage, and nor will we take advantage of the secrecy that many such jurisdictions provide for transactions recorded within them.
Our accounts will be prepared in compliance with this policy and will seek to provide all information that users, including HM Revenue & Customs, might need to properly appraise our tax position.
The Society’s Secretary shall be responsible for overseeing the application of this policy; and the board of directors will review this policy annually to ensure that it is complied with.
In 2021, the Society’s surplus before tax was £343,100. The corporation tax expected on this surplus would be £65,189 (19.0%). In fact, the actual current tax charge was £130,890 (38.15%). The reason behind the Society’s current tax charge being higher than what would be expected is due to the following tax adjustments:
Adjustments to prior periods (-0.06%)
Adjustments to tax charges in prior periods are quite common and can arise for a number of reasons. Sometimes the tax charge for the previous year was calculated for the accounts before the corporation tax return had been finalised and submitted to HMRC, due to the different deadlines for both the accounts and the tax return. This is then updated the year after to reflect any changes between the tax in the accounts and the actual tax charge that was submitted. Other times, we may currently be correcting a mistake from a previous year(s), which is then adjusted for in the current year’s tax charge.
Expenses not deductible and effect of capital allowances (+19.21%)
Some expenses, although entirely appropriate for inclusion in our accounts, are not allowed as a deduction against taxable income when calculating our tax liability. An example of such an expense is depreciation – which is subject to capital allowances instead. This is because, the accounting treatment of capital expenditure is usually different than the tax treatment allowable. In the accounts, an asset is depreciated over its useful economic life; whereas capital allowances are set rules in tax law applied to the type of asset. The differences, however, between the depreciation charged in the accounts and capital allowances claimed on our corporation tax returns – are only timing differences – as eventually, the accumulated depreciation charged, and the total capital allowances claimed, will equal one another. This timing difference has resulted in a deferred tax liability, which will be recognised in annual instalments over the useful economic lives of the assets that it applies to.