Channel Four Television Corporation (Channel 4) is a publicly-owned, commercially-funded, not for profit public service broadcaster. It has a statutory remit to deliver high quality, innovative, experimental and distinctive content across a range of platforms. Channel 4 has a unique hybrid model, as it generates all of its advertising and other revenue from the commercial sector, in order to fulfil its public service remit.
Channel 4 commissions or acquires its content from third party production companies. Our Ofcom broadcasting licence prevents us from being involved in the production of programmes for broadcast on the Channel 4 service. Channel 4’s not-for-profit status ensures that the maximum amount of its revenues can be reinvested in the delivery of its public service remit.
The Channel 4 group is subject to a range of taxes that include, amongst others, corporate income taxes, indirect taxes such as VAT, employment taxes, stamp duties and withholding taxes. In accordance with the requirements of Schedule 19 of Finance Act 2016, this document sets out our approach to UK tax compliance and tax risk in respect of the year ending 31 December 2023.
This policy has been approved by the Board of Channel 4. It will be subject to review on an annual basis.
How Channel 4 manages risks, including any tax risks
The Board and Executive team operate a risk management framework for identifying, evaluating and managing (rather than eliminating) significant risks faced by Channel 4. This framework has been developed by reference to published best practice on internal controls and risk management.
The Board delegates to the Audit Committee responsibility for overseeing risk management and internal controls. The Channel 4 Business Assurance function is responsible for reviewing the effectiveness of the Group’s risk management and internal control procedures, and reports its findings to the Audit Committee.
Channel 4’s Finance Director is the Senior Accounting Officer (SAO) who is responsible for ensuring appropriate tax accounting arrangements are in place. The SAO presents regular tax updates to the Audit Committee to ensure that any significant tax issues are brought to its attention.
The SAO ensures that suitable roles are in place and filled by qualified individuals to manage the day-to-day tax compliance activity of the group. Where more complex tax issues arise, specialist advice is obtained from third party advisers.
Channel 4’s tax risks
Channel 4 has a low appetite for tax risk. Whilst Channel 4 has a high appetite for creative risk taking, its appetite for operational risks is low.
Tax risks are assessed based on the amounts at stake, and also the reputational impact of the matter in question.
As a publicly owned organisation, our stakeholders include the UK Government and the general public, and this is taken into consideration when decisions are taken which have significant tax implications. Where complicated matters arise, we seek input from external advisers and from HMRC.
Where tax matters are subject to a high level of interpretation, Channel 4 prioritises obtaining certainty over the tax position so that we can make informed commercial decisions, rather than seeking to minimise the tax payable.
Channel 4’s attitude to tax planning
Channel 4 endeavours to pay the correct amount of tax at the correct time in accordance with the law.
Where new ventures are entered into, we structure these on sound commercial principles. We do not enter into artificial structures whose sole aim is to secure a tax benefit.
Working with HMRC
Channel 4 seeks to maintain a transparent and productive relationship with HMRC. Regular meetings are held to give updates on business developments and to discuss any relevant changes to tax legislation.
If significant issues arise, Channel 4 will discuss these promptly with HMRC. We also seek to respond to requests for information promptly and to engage with HMRC in a constructive manner. We feel that this is the best way to resolve any issues and to minimise uncertainty.