Modern Slavery and Child Labour Statement for the Financial Year 2017/2018
Morris Group and its subsidiary companies develop homes and neighbourhoods in the UK. Morris's business model recognises that it operates in a cyclical property market where developments can take a number of years to progress from inception, through planning and construction, to completion. This means that the turnover of individual Group companies can vary year on year, taking them above and below the £36 million modern slavery reporting threshold. Morris Group therefore makes this modern slavery statement on behalf of all of the Group companies and joint ventures, all of whom adopt its terms.
Morris regional development companies in Wilmslow, Rugby and Bedford administer a database of approved construction sub-contractors on behalf of the Group. Initial vetting of contractors before their use on developments is a key function performed by Commercial Directors within each operating division.
Sometimes main contractors are used by the divisions where construction requires a single point of contact with design responsibility or there is a single end-user. While there are some limited aspects of the supply chain that are unique to the individual operating companies (for example requirements to use local labour under planning agreements), most of Morris companies’ supply chains are appointed through regional call-off agreements.
A limited quantity of material is sourced directly from suppliers, with the majority of the materials being procured by the contractors engaged to carry out works. Therefore Morris can be several steps removed from the procurement of labour and materials. Nonetheless Morris exercises some degree of control over the sourcing of supplies used on developments and has a long history of sourcing sustainable materials for use on its developments.
One of Morris Group’s key objectives is to make a significant, long-term contribution to the environment and the social and economic fabric of the communities in which it works and its goal is to work with its supply chain to help it achieve this.
The first steps that Morris took to investigate the risk of modern slavery was to carry out internal dialogue with Commercial Directors from around the Group, including representatives from Group Legal, Group Procurement and senior management. From this it became evident that modern slavery is not an isolated issue. It is also closely linked to child labour and should be viewed in the wider context of human rights.
It was acknowledged that Morris already has a good culture of respect and support for human rights, which is implicit in all of its pre-existing corporate policies but that more work was needed to understand properly the possible risk of modern slavery and child labour in its supply chain. Although there has been a great deal of work already carried out looking at the supply chain from an environmental sustainability standpoint, this is not a guarantee that the supply chain is free from modern slavery and child labour. It was agreed that this is a complex area of risk, given the number of possible links in the supply chain and lack of total direct control by Morris, therefore any measures proposed need to be carefully thought through.
Morris requires all new contractors to submit a questionnaire before they will be approved for working on any of its sites. Part of the questionnaire requires contractors to provide information on sustainability, both environmental and social. In 2017 this will be supplemented to include a requirement to provide information on measures that each contractor are taking to combat modern slavery and child labour in their supply chain.
Morris selects the contractors that it uses based on a number of factors and does not always select the offering with the cheapest price when tendering. Morris takes into account the added value offered by each contractor and supplier with reference to Health & Safety, the environment, contract terms and approach to approach to modern slavery.
A key method that Morris uses to exercise control and influence over its supply chain is the contractual terms that it agrees with its contractors and suppliers. The commercial team uses a bespoke contract that all of its site contractors must sign up to.
This contract is being updated in 2017 to include robust anti-modern slavery provisions, including 'flow down' provisions to ensure that the obligations are passed on down the supply chain and not restricted to the first link in the chain.
Site Based Checks:
Morris carries out site inductions for all workers at its construction sites and right to work checks on all of its direct employees. These act as the Group's first line of defence against modern slavery occurring on any site. Company processes will now support these checks and Morris will promptly investigate in the event that there is a suspicion of modern slavery occurring on any site.
Purchase order terms:
The Group has agreed and will implement updates to the Purchase Order terms and conditions for the supply of goods and small scale services that do not warrant a more extensive Call-Off subcontractor order or purchase order.
Group Wide Policy:
Morris’s internal dialogue revealed that the risk of child labour being used in the supply chain is closely related to the risk of modern slavery. As both of these come under the umbrella of human rights, these will be combined into this policy dealing with both issues. The 'Human Rights, Modern Slavery and Child Labour Policy' will be approved by the Board in the financial year 2016/17 as required by the Act.
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Morris Group Tax Strategy
This strategy applies to Morris Group Ltd and to the group of companies headed by Morris Group Ltd (“the Group”) in accordance with paragraph 16 of Schedule 19 to the Finance Act 2016. A list of the entities to which it applies is set out below. The strategy has been published in accordance with paragraph 16 of the Schedule.
This strategy applies from the date of publication until it is superseded. References to ‘UK Taxation’ are to the taxes and duties set out in paragraph 15(1) of the Schedule which include Income Tax, Corporation Tax, PAYE, NIC, VAT, Insurance Premium Tax and Stamp Duty Land Tax. All references relate to UK taxation as the Group has no subsidiaries incorporated or operating outside of the UK.
The Group is committed to full compliance with all statutory obligations and full disclosure to tax authorities.
Governance & Risk Management in relation to UK Taxation
- Ultimate responsibility for the Group’s tax strategy and compliance rests with the Group Board;
- Executive responsibility and day to day management of the Group’s tax is delegated by the Board to the Group Finance Director, who is also the Group’s Senior Accounting Officer;
- The Group operates a system of tax risk assessment and controls as a component of the overall internal control framework applicable to the Group’s financial reporting processes;
- The Group seeks to reduce the level of tax risk arising from its operations as far as is reasonably practicable by ensuring that reasonable care is applied in relation to all processes which could materially affect its compliance with its tax obligations;
- Processes relating to different taxes are allocated to appropriate process owners, who carry out a review of activities and processes to identify key risks and mitigating controls in place. These key risks are monitored for business and legislative changes which may impact them and changes to processes or controls are made when required;
- Advice is sought from external professional advisors where appropriate.
- We obtain advice from appropriately qualified external advisors on specialist tax matters which forms part of our tax return process and we see the input of external advisors as a key source of specific tax expertise to supplement the skills of our own finance team in appropriate cases.
Tax Planning and level of risk
The Group manages risks to ensure compliance with legal requirements in a manner which ensures payment of the right amount of tax.
We seek to minimise the risk of a dispute with HMRC by being open and transparent about our tax affairs. At all times we seek to fully comply with our regulatory and other obligations and to act as a responsible corporate citizen.
Relationship with HMRC
The Group strives to have a transparent and constructive working relationship with HMRC, built on integrity and consistency of approach.
When submitting tax computations and returns to HMRC, all relevant facts are disclosed and transactions or issues where it is considered that there is potential for the tax treatment to be uncertain, are identified.
Any inadvertent errors in submissions made to HMRC are fully disclosed as soon as reasonably practicable following identification.
List of entities covered by this strategy
- Morris Group Ltd
- Morris Homes Ltd
- Morris Homes (North) Ltd
- Morris Homes (Midlands) Ltd
- Morris Homes (Eastern) Ltd
- Morris Homes Developments Ltd