<h2>Approach to the management of UK Taxes for the year ended 31<sup>st</sup>
December 2018</h2>
<h2>Introduction</h2>
<p>The Porterbrook Group (see the list of group entities at the end of 
this statement) leases trains and provides maintenance services to 
customers based in Great Britain. All entities in the Porterbrook Group 
are UK resident for tax purposes. The Group complies with the tax law 
and practice of the UK. Compliance for the Group means paying the right 
tax at the right time which involves the following points which are 
covered later in this statement:</p>
<ul>
 <li>an open dialogue with HMRC to disclose      relevant facts and circumstances relating to significant tax matters;</li>
 <li>having appropriate tax governance and tax      accounting arrangements in place;</li>
 <li>applying tax legislation within the spirit and      intention of 
Parliament, noting that this may not always be clear and the      
Group’s view could differ from HMRC’s;</li>
 <li>seeking tax efficiency to maintain the Group’s      competitive 
position by claiming tax reliefs and incentives where      available; 
and </li>
 <li>operating in line with this statement.</li>
</ul>
<p>The publication of this statement is approved by the Board of 
Directors and is regarded as satisfying the statutory obligation under 
Para 16(2) Schedule 19, Finance Act 2016 for all entities listed at the 
end of this statement.</p>
<h2>Attitude towards tax planning</h2>
<p>Porterbrook seeks appropriate external professional advice in the 
areas of tax compliance and delivery. Where tax planning is undertaken 
with assistance of the Group’s professional advisors, it is to support 
genuine commercial activity and will have regard to the potential impact
 on the Group’s reputation. Assessment of UK tax laws will form part of 
the appraisal of commercial opportunities that have been identified to 
maximise value for the Group’s Shareholders on a sustainable basis. All 
aspects of commercial opportunities (including tax) are subject to 
appropriate review and approval processes. Where significant tax 
uncertainty exists we will seek to reduce any risk through open dialogue
 with HMRC.</p>
<h2>Level of risk accepted</h2>
<p>Porterbrook’s objective is to manage its tax affairs so that the risk
 of material tax errors remains low. This risk appetite has been set and
 agreed by the Group Board, which includes representatives from each 
member of the consortium that owns the Group.</p>
<p>Given the scale, and specifically the tax complexity, of key aspects 
of the Group’s activities (namely corporation tax on leasing and 
financing transactions), risks will inevitably arise from time to time 
in relation to the interpretation of tax law. To minimise its tax risk, 
Porterbrook aims to comply with all relevant tax laws, regulations and 
disclosure requirements. To do this, Porterbrook, after seeking external
 advice as required, will apply legislation within the spirit and 
intention of Parliament. Where this is not clear in respect of material 
items, Porterbrook seeks further clarification from HMRC, following 
which we note that Porterbrook’s view could still differ from that of 
HMRC.</p>
<p>We proactively identify and evaluate tax risks, and the impact that 
any new legislation has on these tax risks and they are reported to and 
monitored by the Group’s Board.</p>
<h2>Approach to dealing with HMRC</h2>
<p>Led by the Chief Financial Officer and supported by the Board, 
Porterbrook seeks to have an open, professional, transparent and honest 
dialogue with HMRC regarding all taxes and duties, which includes at 
least one face to face meeting each year. Through regular real-time 
communication with the HMRC Customer Compliance Manager, Porterbrook 
informs HMRC of relevant events as they arise which could have a 
material impact on its tax reporting.</p>
<p>Where there are areas of significant tax uncertainty Porterbrook 
presents its analysis to HMRC with the intention of reaching agreement 
on treatment in advance of preparing and submitting the relevant 
returns. Where agreement cannot be reached in these timescales, and in 
relation to all relevant tax issues, the approach adopted in the return 
will be appropriately disclosed. </p>
<p>Porterbrook will respond to HMRC requests as soon as reasonably 
possible and agree a reasonable timetable for response with HMRC.</p>
<p>Porterbrook contributes to the development of tax legislation where 
appropriate, either directly with HMRC through public consultation 
processes or indirectly via industry representative bodies.</p>
<h2>Governance and Risk Management</h2>
<p>Porterbrook’s business is characterised by a relatively low volume of
 high value transactions and its systems and controls are set 
accordingly. The key tax risks relate to Corporation Tax, Income Tax and
 VAT; the calculation of payroll and the associated taxes are outsourced
 to a local bureau.</p>
<p>The Chief Financial Officer, supported by the Finance Department, is 
responsible for the day to day tax accounting arrangement of the Group. 
The Chief Financial Officer reports all significant financial matters to
 the independently chaired Porterbrook Board. Where required, external 
advice is sought in relation to unusual or complex transactions and this
 advice is provided to the Board. The Board retains overall 
responsibility for the group’s policies and processes for managing 
financial and operational risks. These arrangements ensure that all 
decisions related to significant tax risks are subject to review by 
suitably qualified and experienced staff and are approved in manner 
consistent with the other risks to which the business is exposed, with 
the objective that the Group’s UK tax obligations are met.</p>
<h2>Group entities covered by this Statement</h2>
<p>Porterbrook Holdings I Limited<br>
Porterbrook Holdings II Limited<br>
Porterbrook Investments I Limited<br>
The Porterbrook Partnership<br>
Porterbrook Rail Finance Limited<br>
Porterbrook Leasing Mid Company Limited<br>
Porterbrook Leasing Company Limited<br>
Porterbrook Maintenance Limited<br>
Porterbrook March Leasing (4) Limited<br>
Porterbrook Leasing Asset Company Limited</p>