UK ACCO Brands Tax Strategy

1. Overview of the Group

The ACCO Brands Group (ACCO Brands), whose ultimate parent, ACCO Brands Corporation, is a publicly listed company on the NYSE is one of the world’s largest suppliers of academic, consumer and business products. Its brands include Derwent^®, Esselte^®, Five Star^®, GBC^®, Hilroy^®, Kensington^®, Leitz^®, Mead^®, NOBO^®, Quartet^®, Rapid^®, Rexel^®, Swingline^®, Tilibra^®, Wilson Jones^® and more. Product lines include staplers and punches, paper shredders, binding machines, laminators, notice boards and easels, stationery products, computer accessories, DIY tools, coloured pencils and more. ACCO Brands has many customers, both local and global, to whom it offers a wide portfolio of products and services through its extensive logistics, distribution and sales networks. In the U.K., ACCO Brands has several legal entities, with the main trading entities being ACCO U.K. Ltd., Esselte UK Ltd. and Esselte Ltd. ACCO Brands Europe Ltd. is the European group financing company.

2. Purpose

The purpose of the Tax Strategy is to communicate the policy for the management of tax within ACCO Brands Europe Ltd. and its subsidiary undertakings (the Group), which includes all U.K. companies/branches of the group (including dormant companies) for all U.K. taxes. It is important to ensure that consistent and effective tax standards are maintained across the Group as tax (both direct and indirect) can have a significant cash, profit and loss impact on the Group and, therefore, on many of the Group’s business activities. This Tax Strategy will be owned by the European Leadership Team (ELT) of ACCO Brands and any amendments will be discussed and approved by the ELT. It is effective for the year ending December 31, 2018, and will remain in effect until any amendments are approved by the ELT. The ELT will be responsible for ensuring that the Tax Strategy is published in accordance with Schedule 19 of the United Kingdom Finance Act 2016 and regards this publicly available document as complying with its duty under that legislation. This Tax Strategy will be reviewed, updated and republished with the following years’ version annually in line with legislation.

3. Tax Objectives

The Group Finance department is responsible for all taxes within the Group. Its objective, in relation to tax, is to support the Group’s strategy, while ensuring compliance with relevant laws and filing obligations.

Tax performance will be measured in the following ways:

• A clearly understood, communicated and supported strategy;
• Paying the appropriate amount of tax by the due dates;
• Forecasting and planning tax cash payments accurately;
• Ensuring the most effective tax elections, claims and options are considered, with respect to materiality, to manage the tax paid by the Group but will not use them for purposes which are knowingly inconsistent with the intent of the legislation;
• Ensuring that any transactions undertaken by the Group are affected tax efficiently;
• Implementing and maintaining controls and procedures, relating to all taxes, ensuring that the correct amount of tax is paid;
• Act in a proactive fashion in relation to the Group’s tax affairs; and,
• To maintain the Group’s reputation as a fair contributor to the worldwide economy, which applies tax rules in good faith and in the spirit they are intended.

The Group’s strategic objective is to comply with legal requirements in the taxing jurisdictions in which the Group operates in a manner that ensures the right amount of tax is paid, while creating sustainable shareholder value, underpinned by a tax philosophy based on an open, co-operative and transparent relationship with the tax authorities.

4. Risk Management

Effective risk management is paramount for the Group and underpins its business strategy. The Group’s appetite for risk is a carefully calibrated part of the business-model, aligned to the strategic and corporate objectives. The Group’s on-going, tax risk approach is based on principles of reasonable care and materiality. Such tax risks are reviewed on a regular basis to ensure that risks are adequately managed.

5. Roles and Responsibilities

The ELT is ultimately responsible for tax governance. The ELT has delegated this responsibility to the Senior Vice President (SVP) of Finance  who will report to the ELT, as required. The ELT is responsible for ensuring there is an appropriate framework for the implementation of the policy and oversight of the identification and management of tax risk. The ELT maintains responsibility for implementing new controls where material tax risks are identified.

The SVP of Finance has ownership of the Group’s tax operations and oversight of tax risk, with the detailed analysis and preparation of the tax records covered by the Financial Controllers.

Performance of the Group Finance team, the Financial Controllers and these other stakeholders is reportable to the SVP of Finance who, in turn, reports to the ELT.

The SVP of Finance’s responsibilities also include:

• Regular communication with the ELT regarding management of material tax risks and opportunities;
• Reviewing any significant transactions (e.g. acquisitions, disposals, financing arrangements);
• Approving external adviser appointments;
• Monitoring adherence to the Tax Strategy; and
• Approval of tax disclosures for the Group’s financial statements.

In addition, as part of its on-going review of corporate governance, the ELT will continue to evaluate the Group’s performance to ensure it maintains good corporate governance.

6. Tax Planning Parameters

The proactive and timely communication of business transactions is key to allowing effective tax management to be undertaken through liaison with external advisers. Effective liaison at the planning stage of a transaction will ensure that tax risks and opportunities inherent in transactions are managed effectively

When considering tax-planning opportunities, the Group will review the plans with the following parameters to determine whether the tax risks presented by any particular plan are acceptable or not:

• Commercial purpose: All transactions must have a commercial purpose.
• Reputation impact: The planning should have limited impact if details were in the public domain.
• Impact on cash flow: Cash flow should be positively impacted if planning is successful, with the potential upside benefit outweighing any downside cost.
• Strength of tax advisers’ opinion: Appropriate external advice, including Tax Counsel opinions where relevant, will be obtained as necessary.

7. HMRC Relationship

The Group is committed to an open, transparent relationship in its dealing with HMRC and will seek to work in partnership with HMRC and other tax authorities around the world. Where there is uncertainty in respect of particular tax treatments, the Group shall enter into up-front discussions with HMRC to obtain certainty or clearance in advance. All dealings with the tax authorities and other relevant bodies will be conducted in a collaborative, courteous and timely manner.

Issued: November 2018 for financial year ended December 31, 2018. Version: 2018/1