QVC UK Holdings Limited

UK Tax Strategy

This published tax strategy covers QVC UK Holdings Limited, all of its UK tax-resident subsidiaries, its affiliates and applies to all UK taxes and duties. It satisfies our obligations under Schedule 19 of the UK Finance Act 2016 in respect of the financial period ended 31 December 2019. References to “QVC” are to QVC, Inc. a Delaware corporation. References to “QVC UK” or the “Company” are to QVC UK Holdings, Ltd. and all of QVC UK Holdings Limited’s UK tax-resident affiliates. References to “UK Taxation” are to the UK taxes set out in paragraph 15(1) of Schedule 19, which include: Income Tax, Corporation Tax, Value Added Tax, PAYE, Stamp Duty, Customs Duties and other taxes and duties. References to “tax” or “taxes” are to UK taxation and to all other corresponding worldwide taxes and duties for which QVC UK has legal responsibilities.

Background


QVC is a retailer of a wide range of consumer products, which are marketed and sold primarily by merchandise-focused televised shopping programs, the Internet and mobile applications. QVC is an indirect wholly owned subsidiary of Qurate Retail, Inc. (“Qurate Retail”, formerly Liberty Interactive Corporation), which is a US public company. For the year ended 31 December 2018, QVC had world-wide net revenue in excess of $11 Billion and over 21,000 world-wide employees. QVC UK broadcasts 16 hours of live programming each day and reaches approximately 28 million households that are located in both the UK and the Republic of Ireland.

Approach of the Company to risk management and governance arrangements in relation to UK taxation


QVC Tax Department located at QVC’s headquarters in the United States is responsible for QVC’s global tax risk management, which includes tax risk management of behalf of QVC UK. QVC’s Vice President (“VP”) of Tax manages a staff comprised of tax professionals and has responsibility for all day-to-day tax-related matters. The VP of Tax reports directly to QVC’s Chief Financial Officer (“CFO”) who has oversight over QVC accounting and tax matters and who reports to the Qurate CEO. QVC UK complies with the Senior Accounting Officer (“SAO”) regime in the UK. The QVC UK Director of Corporate Finance is the SAO and reports to the QVC Senior VP of Corporate Finance, the QVC VP of Tax and the QVC UK VP of Finance and Strategy. Compliance with the SAO regime coupled with QVC UK’s accounting and tax internal controls ensures the accuracy of the accounting and tax records to support accurate tax reporting. In addition, tax returns are reviewed by external tax service professionals prior to submission to HMRC.

QVC UK’s ultimate shareholder, Qurate Retail also provides oversight on material tax planning and tax compliance matters related to both QVC and QVC UK and reports material tax matters to the audit committee of Qurate Retail’s board of directors. In addition, QVC UK seeks external tax advice from legal and professional advisory firms with respect to complex tax matters or where there is tax uncertainty in how applicable legislation and guidance is to be interpreted.

The Company’s attitude towards tax planning (so far as effecting UK taxation)


QVC UK aims to comply with all UK tax rules and tax regulations. QVC UK’s tax planning is aligned to achieve the commercial goals of the business. QVC UK does not engage in aggressive tax planning transactions or transactions that lack economic substance. Related party transactions are conducted on an arm-length basis in accordance with transfer pricing rules. The related party transactions are supported by transfer pricing studies carried out by reputable independent third parties where appropriate.

The Level of risk in relation to UK taxation that the Company is prepared to accept


QVC including QVC UK has adopted the Qurate Retail Code of Business Conduct and Ethics (“Code”). One of the key tenets of the Code is Compliance with Laws and Regulatory Requirements. This requires that all QVC employees respect and comply with the laws, rules and regulations of countries in which QVC UK conducts its business or which otherwise are applicable to QVC UK. The Company adopts a low- risk approach in relation to its tax affairs.

The Company’s approach towards its dealings with Her Majesty’s Revenue and Customs (“HMRC”)


QVC UK is committed to having a transparent and honest working relationship with HMRC. QVC UK pro-actively engages with the HMRC about changes to the business that have tax significance. QVC endeavors to keep HMRC aware of transactions with significant UK tax implications and will seek clearance on tax compliance matters at an early stage where appropriate. We will work with HMRC to respond to queries and resolve differences in a timely and professional manner.