Taxes might be boring for some people, but they play a vital role in our society. I am a strong supporter of transparency and of working with tax authorities to make things simpler, where possible, and give greater levels of confidence that our tax affairs are in order.
Taxes like VAT are generally paid by consumers because they are included in the price of a product or service. Businesses in the UK must manage and collect these taxes on behalf of the Government; at BP we take this responsibility very seriously.
Every year we submit over 25,000 indirect tax returns from our global business. These cover all sorts of taxes such as VAT, sales taxes, excise taxes and customs duties. To some extent these taxes are payable on everything we buy, sell or move; from our oil fields and pipelines, to crude oil and gas supplies from wells to the refineries, to the fuels you buy at our petrol stations and the coffee you drink at Wild Bean Cafés. We manage almost $200bn of indirect taxes and associated risk across the world. It’s a huge task. More and more, Governments rely on money from this type of taxation and we work hard to make sure that we manage these responsibilities properly. Last year, in the UK alone, we collected almost £2.5 billion of duties, oil production and employee taxes for the Government.
It is very important to us that we always pay what we owe and that we pay it on time. It is also important that we have measures in place to give ourselves, as well as our shareholders and governments, confidence that we are not making mistakes.
To help us comply, and to manage the complexity we have a framework in place which continuously monitors our activities and helps us make sure we are quickly resolving any issues that we identify. That’s no mean feat in a company our size and with the huge range of activities we perform — we employ over 400 people around the world to help manage our tax liabilities and make sure our tax returns and payments are accurate.
There is always more that we can all do, but here at BP we are committed to doing the right thing – that means keeping to the letter and the spirit of the law and working with governments so that taxes are collected for the benefit of the community. We are committed to making sure we play our part.
Nick Burgin is Tax Director of Indirect Taxes & Group Operations at BP. His appointment in August 2013 reflects BP’s continued focus on the importance of Indirect Taxes and the need to ensure they are managed at a global level in an increasingly complex world. Prior to joining BP Nick spent 12 years with IBM in London and New York as IBM’s VP Indirect Taxes. He has over 10 years’ experience in public practice working in London, Moscow and in Dublin, including the UK tax authority.