HII United Kingdom Tax

Introduction and Scope

Huntington Ingalls Industries, Inc. (“HII”) is America’s largest military shipbuilding company and a provider of professional services to partners in government and industry. We conduct most of our business with the U.S. Government, primarily the Department of Defense (“DoD”) in the United States. HII is aligned into three reportable segments: Ingalls, Newport News Shipbuilding, and Technical Solutions.

As prime contractor, principal subcontractor, team member, or partner, we participate in many high-priority U.S. defense technology programs. Ingalls includes our non-nuclear ship design, construction, repair, and maintenance businesses. Newport News includes all of our nuclear ship design, construction, overhaul, refueling, and repair and maintenance businesses. We also provide a wide range of professional services, including fleet support, integrated missions solutions, nuclear and environmental, and oil and gas services through our Technical Solutions segment.

HII sets out below its group’s principles that govern the UK tax affairs across all HII Group companies in accordance with Paragraph 16, Schedule 19, Finance Act 2016. This strategy applies from the date of its publication until it is superseded.

Governance

The Director of Tax oversees tax strategy, tax compliance and tax risk management, reports directly to the Vice President of Finance and annually reviews the status of significant tax matters with senior leadership. The Director of Tax also leads the Corporate Tax team, which is responsible for the day-to-day management of the tax affairs of the company, including the tax affairs outside of the US, including the UK. The Corporate Tax team is staffed with appropriately qualified and experienced individuals.

Attitude Towards Tax Planning

The company aims to be fully compliant with tax legislation in every jurisdiction in which it operates and pay the correct amount of tax due on time. HII structures its affairs based on sound commercial principles and does not engage in aggressive tax planning. A “more likely than not” approach is taken when determining whether a tax risk is acceptable. The company seeks external advice where there are resource restrictions, specialist guidance requirements or matters where the tax due could be subjective.

Risk Management and Level of Risk

The company operates a group wide risk management framework, with comprehensive policies and procedures, which encompasses the overall internal control framework as required by the Sarbanes-Oxley Act, and includes the management of tax risks. The company regularly reviews and monitors the controls in place and will make changes where required. The company provides appropriate training to both the individuals in the Corporate Tax team and the wider business where applicable. In addition, all employees of the company are required to comply with the Code of Ethics and Business Conduct (“Code”) and certify annually their understanding of and compliance with the Code. The Code requires all employees to comply with applicable laws and regulations and to ensure the integrity of their actions and decisions, as well as those who act on the company’s behalf.

Working with HMRC

We believe that a transparent relationship with HM Revenue and Customs (HMRC) that is constructive and built on mutual respect with open lines of communication is vital to the success of our business. We provide full disclosures in the submissions of tax returns and in all correspondence with HMRC.