The Board of Directors of Iberdrola, S.A. (“Iberdrola”) is responsible for formulating the tax strategy of the wider group of which Iberdrola is the controlling entity. The various companies of the Iberdrola Group are each responsible for implementation and monitoring of that tax strategy.
The Iberdrola Board has approved a Corporate Tax Policy (the “Iberdrola Tax Policy”) which forms part of Iberdrola’s Governance and Sustainability System and sets out Iberdrola’s commitment to responsible tax practices throughout the Iberdrola Group. The Iberdrola Tax Policy was initially approved by the Iberdrola Board in 2010 and was last amended in March 2025.
Until April 2025 the Iberdrola Tax Policy was directly adopted by the Board of Directors of Scottish Power Limited (“ScottishPower”) and formed part of ScottishPower’s Governance and Sustainability System.
The Board of Directors of ScottishPower has the power to design, assess and continuously revise ScottishPower’s Governance and Sustainability System, and specifically to approve and update policies which contain the guidelines governing the conduct of ScottishPower and its group. In May 2025 ScottishPower approved its own ScottishPower Corporate Tax Policy (the “SP Tax Policy”), which is aligned with and informed by the Iberdrola Tax Policy.
ScottishPower’s tax strategy is based on three fundamental pillars: compliance with tax obligations, ongoing cooperation with the tax authorities, and transparency.
Ensuring application of good tax practices is integral to the governance framework of the whole Iberdrola Group and there are established systems of monitoring and control. The ScottishPower Board, through the ScottishPower Audit and Compliance Committee, monitors compliance of all relevant UK members or affiliates of the ScottishPower Group with the SP Tax Policy and reports annually on that compliance, and on taxes paid and collected, to Iberdrola’s Audit and Risk Supervision Committee.
The ScottishPower Board’s objective is to keep tax risk as low as possible, given the size and complexity of the ScottishPower Group, and for the companies to be viewed as low risk in relation to tax behaviours. To this end, the tax function is staffed by suitably qualified and experienced people and tax advisers are engaged to provide, where necessary, additional resources and specific expertise. External advisers are not used to devise plans or structures with the objective of avoiding payment of taxes.
Key risks are identified and mitigated through a process of review and extensive internal controls. The ScottishPower Chief Financial Officer and the SP Electricity North West Chief Financial Officer, in their capacity as the Senior Accounting Officers of their relevant group, take responsibility for tax accounting arrangements.
The operation of controls within the taxes area is monitored by Internal Audit and also by a Control Team that is independent of the tax function.
When a significant transaction is contemplated, the tax aspects are considered as part of the overall commercial appraisal and, to proceed with the transaction, appropriate operational management approval is required. Decisions on whether or not to pursue opportunities, or to make operational changes, are taken for entirely commercial reasons and companies do not enter into artificial arrangements to avoid taxes. In common with other businesses, UK companies in the ScottishPower Group take advantage of available reliefs, many of which are designed to encourage activities and practices that government believes are beneficial to the national economy.
In full compliance with the SP Tax Policy, all companies in the ScottishPower Group are responsible taxpayers that seek to be open, honest and transparent in dealings with tax authorities and to comply with both the letter and spirit of tax laws set by government. The ScottishPower Group, and its constituent companies, aim to remit taxes due and comply with all tax obligations on a timely basis and to have relationships with tax authorities based on mutual trust and cooperation. The ScottishPower Group may hold a different view from the tax authority on a particular matter. It aims, however, to resolve any such differences in a constructive manner, consistent with its stated approach to dealings with tax authorities.
SPW Investments Limited and its subsidiaries, ScottishPower Overseas Holdings Limited and eHeat Networks Limited regard publication of the above information as complying with their duties to publish tax strategies under paragraph 19(2) and paragraph 22(2), Schedule 19 of the Finance Act 2016 for the financial year ended 31 December 2025. More detailed information is contained in the SP Tax Policy and the wider Governance and Sustainability System published by ScottishPower.
Reviewed and updated: 09 October 2025