DPA 2018 / GDPR
Third Party Risk Managment
Maximising relief on capital expenditure
Support for sales into the EU
Case studies
Our client had previously focussed on making B2C sales in the UK only, through their bricks and mortar shop and their own website. They wanted to break into the EU market, to achieve this they signed up with a major marketplace platform to assist them.
All of the client’s products were made in the UK with inputs from both domestic and overseas suppliers. The intention was to make deliveries to EU customers from UK stockpile and also utilise the marketplace’s collection of warehouses on the continent (holding its stock before delivery, to speed up the time-to-customer).
As our client sold food products, our first role was a review confirming their commodity code and to determine it they had 'UK origin'. The importance of this is to determine whether duties are be payable when the product arrived in the EU, and if they were due, could they be avoided by virtue of the Brexit trade deal. We also reviewed the VAT treatment in the EU member states they intended to target first (as while the UK allows for many food products to be zero rated, that is not the case in other countries).
Having concluded that duties would apply, our client was able to accurately cost their sales and then calculate a customer price accordingly. We assisted in mapping where those import VAT and duty costs would hit as for some sales, e.g. packages under €150 it could be avoided by use of an Import One Stop Shop (IOSS) registration. We also informed the client of the VAT registration requirements and reporting obligations related to the use of EU warehouses and the fact that when selling via marketplaces it will sometimes they need to account for the VAT due and not the seller.
The client entered a new market confident in understanding their VAT and duty costs on import into the EU along with their selling obligations. Helping them to control their costs and be able to instruct their couriers accurately on the information needed for making imports. Our client also determined when to charge VAT on sales and how to remit that VAT to the appropriate tax authorities.
The client’s sales are now seeing good growth and looking ahead to expand to further territories. We will continue to support them, with the knowledge of the benefits to plan ahead. This now means that products are not stuck at the border and customers will not be dissappointed. Unexpected costs were also avoided so profit margins are maintained at expected levels. While this was an expansion into new territories using modern technologies, the age old mantra of 'being prepared' still held true and that upfront investment by our client helped them to a much smoother journey going forward.
Challenge
Outcome
Support
We have carried out a number of capital allowance projects for our clients ranging from £1 million of expenditure on fitting out and updating a number of shop units, to a £5 million spend on fitting out five goods storage warehouses.
In such cases our clients asked us for specialist support in this ever changing area to ensure they maximised their capital allowance claims, understood how the claims impacted their corporation tax position for cashflow and loss planning purposes, understood the optimum time of when to make large capital spends, and to support any future sales processes.
In each instance we carried out a full review of the capital expenditure and underlying contracts to establish how the many items should be treated based on the relevant legislation and supporting case law at the time. Recently, with the introduction of the temporary super deduction, the benefit to our clients has increased and so has the complexity of how various reliefs interact with one another. We used our specialist knowledge in these areas to help our clients ensure they balanced benefit with risk.
The capital allowance projects we have worked on have included a number of items that required detailed analysis and we worked closely with our clients finance teams to obtain key explanations and details to ensure treatment of such items could be fully evidenced and supported. Our work in each instance included drafting a report to support the capital allowance claim that was filed with HMRC alongside the corporation tax return for the relevant year to reduce the risk of challenge.
Explore our Capital allowance services
Challenge
Outcome
Support
The client, a large national retailer, had established a TPRM programme in respect of its supplier onboarding programme. This was undertaken by the technology team but there was no independent assurance regarding the programme.
Our role is to provide a quarterly independent sample check, confirming there is an audit trail and that internal audit/ assurance principles are being applied, including checks upon evidence secured and thematic findings to inform continuous learning.
The organisation receives assurance that its supplier risk assessments and risk profile can be substantiated. Lessons have been learnt and are fed back on an ongoing basis to the technology team, including highlighting good practice to be applied and recurring issues with the process.
Challenge - TPRM
Outcome
Support
By carrying the work out in a timely manner we worked with our clients to ensure they obtained key details and information from the contractors that was used to inform the capital allowance treatment. This also enabled our client to manage their cashflows and plan loss utilisation given the capital allowance claims were a key aspect of working out in year corporation tax positions. We continue to work with the same clients and new clients on capital allowance projects to ensure claims reflect the everchanging capital allowance landscape.
This national high street retailer required a tailored programme of work to ensure that the retailer could establish both short and longer term solutions to GDPR across the business.
We completed an initial gap analysis against the organisations systems and structures in place. This included working through all key areas of the organisation, including Finance, Human Resources, Operations, Business Development and Marketing.
We then visited a cross section of retail sites in order to understand the systems in place to manage staff and customer personal data.
We provided advice regarding the processing of personal data for instore promotions.
We produced a series of tailored summary reports for the different areas of the business which highlighted immediate and longer term actions to take. We worked with the Executive lead to finalise the policy framework and provided training to all departments.
Key outcomes included a revised policy and procedural framework, alongside general system improvements across manual and technological systems, with the organisation able to embed data protection requirements, reducing risk exposure and addressing historical contract and data retention risks.
Challenge
Outcome
Support