Fair Tax Mark Statement for Westmill Wind Farm Co-operative Limited (January 2022)
This statement of Fair Tax compliance was compiled in partnership with the Fair Tax Foundation (“FTF”) and certifies that Westmill Wind Farm Co-operative Limited (“Westmill”) meets the standards and requirements of the FTF’s Solely UK-based Business Standard for the Fair Tax Mark certification.
Westmill 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 in this way is the clearest indication we can give of being responsible participants in society. We will fulfil our commitment to paying the appropriate taxes that we owe by seeking to pay the right amount of tax, 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 that we undertake during the course of our trade.
We will not seek to use those options made available in 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. Westmill 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 the information that users, including HM Revenue & Customs, might need to properly appraise our tax position.
Current Tax Reconciliation
The surplus before tax for the year ended 31 December 2020 for Westmill was £144,551. The expected tax charge on this surplus would be £27,465; however, the actual current tax charge for the period was £nil. The main reason why Westmill’s current tax charge is lower than what would be expected is due to the utilisation of tax losses brought forward from earlier periods.
The following current tax reconciliation and accompanying narratives give a more detailed explanation of the difference between the expected tax charge on Westmill’s accounting surplus and its actual current tax charge:
1) The accounting treatment of capital assets is usually different than the tax treatment allowable. This is because, 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 rate in the accounts and capital allowances claimed on the corporation tax return – are only timing differences – as eventually the accumulative depreciation and the capital allowances claimed will equal one another.
2) Tax losses from earlier periods can be carried forward and relieved against future surpluses so that the correct amount of tax is applied to the overall historic surpluses generated. Once the tax losses have all been used, tax will then become chargeable on the surpluses generated thereafter.
As at 31 December 2020, Westmill had a deferred tax liability of £33,544 (2019: £5,957) on its balance sheet, after expensing £27,587 in relation to accelerated capital allowances to its revenue account. The full £27,587 tax charge stated in Westmill’s revenue account is made up of this deferred tax charge.
Each director is entitled to claim a fee of £500; therefore, all directors – including the Chair – are paid the same amount. In the past, some directors have chosen not to claim the fee that they are entitled to.