David Lloyd Leisure Tax Strategy

Introduction

David Lloyd Leisure is Europe’s largest and fastest growing group of premium racquets, health and fitness clubs. We operate clubs in the UK and mainland Europe and employ over 9,000 people.

Our main trading company is David Lloyd Leisure Limited whose ultimate UK corporate parent is Deuce Holdco Limited which owns Deuce Acquisitions Limited which, in turn, owns and manages the remaining companies in the group. Our tax strategy applies to all subsidiaries of Deuce Holdco Limited together with David Lloyd Clubs Holdings Limited and subsidiaries under common ownership with Deuce Holdco Limited (together “The Group”). This is in accordance with paragraph 22(2) and 22(4) of Schedule 19 to the Finance Act 2016 and applies from the date of publication until superseded.

Our tax strategy applies to the taxes and duties set out in paragraph 15(1) of the Schedule. As a result of our business activities throughout the UK and in mainland Europe, we pay- directly or indirectly- substantial and varied taxes including corporate income taxes, VAT and employment taxes in all jurisdictions as required. Our tax strategy is underpinned by principles of full compliance, transparency and sound risk management. We act lawfully and with integrity and in our behaviour we aspire to the highest professional and ethical standards.

Governance in relation to taxation

Ultimate responsibility for The Group’s tax strategy and compliance rests with the Board of Deuce Acquisitions Limited as delegated to the CFO. The Audit & Risk Committee’s requirement to monitor the integrity of The Group’s financial reporting system, internal controls and risk management framework, expressly includes those elements relating to taxation.

The CFO is the Board member with responsibility for tax matters and day-to-day management of the tax affairs delegated to the Tax Manager. The Group’s tax team is staffed with appropriately qualified individuals.

The Board ensures that The Group’s tax strategy is one of the factors considered in all our significant business decisions.

Risk Management

We manage tax risks and tax costs in a manner consistent with applicable regulatory requirements and with shareholders’ best long term interests, taking into account operational, economic and reputational factors. We seek to reduce the level of tax risk arising from our operations as far as is reasonably practicable by ensuring that reasonable care is applied in relation to all processes which could materially affect compliance with our tax obligations.

Our approach to taxation is reviewed periodically in light of changes to:

-The general business environment

- Our business operations

- Tax laws and regulations

- Emerging business and tax risks

We have established and maintain robust policies and compliance processes and controls to ensure the integrity of our tax returns and timely and accurate payment of tax. We maintain documented tax policies and procedures in relation to key tax processes which are continually reviewed.

Our processes, policies and governance operate to ensure compliance with tax laws and regulations in the territories in which we operate and are designed to identify and mitigate material tax risks. In the event that applicable laws and regulations are subject to interpretation, we seek appropriate assurance regarding the position taken.

Attitude towards tax planning and level of risk

We manage tax risks to ensure compliance with legal requirements in a manner which ensures payment of the right amount of tax. At all times we seek to comply fully with our regulatory and other obligations and to act in a way which upholds its reputation as a responsible corporate citizen. In relation to any specific issue or transaction, the Board is ultimately responsible for identifying the risks, including tax risks, which need to be addressed and for determining what actions should be taken to manage those risks.

When entering into commercial transactions, the Group seeks to take advantage of available tax incentives, reliefs and exemptions in line with, and in the spirit of, tax legislation. We do not undertake tax planning unrelated to such commercial transactions.

We apply the OECD guidelines, UK and other national legislation to our inter-company transactions.

Relationship with Tax Authorities including

HMRC We seek to develop and maintain professional, transparent and constructive relationships with all tax authorities in the jurisdictions in which we operate, based upon mutual trust and respect. We ensure there is access to relevant information demonstrating the integrity of our tax processes, returns and payments.

We ensure that the relevant tax authorities are kept aware of significant transactions and changes in the business and we discuss any tax issues arising at an early stage. When submitting tax computations and returns to HMRC, we disclose all relevant facts and identify any transactions or issues where it considers that there is potential for the tax treatment to be uncertain.

Any inadvertent errors in submissions made are fully disclosed to the relevant tax authority as soon as reasonably practicable after they are identified.