We work with a number of retail businesses that are part of global groups providing advice and compliance services as they do business in existing countries or expand into new ones.
Common areas that we assist our international retail clients with include providing VAT, Customs and Corporate tax advice in connection with changes in supply chains, helping to structure efficient royalty flows to minimise withholding tax obligations, assistance with compliance and cost associated with employees moving between territories, and structuring advice to manage the risk of tax liabilities in countries where no formal structure exists.
With VAT being a tax on transactions it is vitally important for those in the retail trade to concentrate on it. Whilst most goods delivered in the UK will be subject to a standard rate of VAT it is businesses which make sales to overseas customers, often via marketplaces and the use of overseas warehouses, who face a complicated matrix of VAT impacts.
Having a good knowledge of your supply chain so it’s possible to know the VAT due on a sale, alongside robust transactional data to capture that is a must have. It allows you to know how to account for the VAT (OSS, IOSS, local registrations) and also manage potential costs such as import VAT and duties. Crowe helps both UK businesses and also overseas ones selling into the UK to get their obligations right.
Explore our VAT and Customs Duty services
Since 1 January 2021 there has been the potential for duty charges to occur when goods move between the UK and EU. This was the consequence of Brexit and made these movements subject to the same rules as those applied for rest of the world items. Duties are non-recoverable and hence a straight cost to businesses. Whether they apply depends on many variables such as their commodity code, origin, intended use and applicability of trade agreements. We will help our clients to understand this, ensuring they can best manage any costs and have control on the processes associated with them such as declarations and record keeping.
Find out all the latest updates and developments on our Crowe Customs hub
Available on demand
Retail today involves utilising a variety of different sales channels to ensure all possible routes to market are covered. It is not unsurprising for a single retailer to be selling via its own physical shop and online website as well as being on various online marketplaces (i.e. Amazon, Ebay, etc.). Many retailers now also sell the brands of other retailers on their own websites.
This proliferation of routes to market, whilst being great for sales, bring significant logistical and tax issues to manage. For each of the different options mentioned above there are potentially two or more VAT treatments to consider depending upon how the goods are delivered, with the value of packages sent and the contractual relationships with online market places also having an influence. Brexit has undoubtedly made the position more difficult and also meant for UK retailers in particular, that there is often a need for multiple registrations to be held so as to account for VAT correctly.
We work with many businesses to ensure that tax relief is maximised on their capital expenditure, through helping them compile capital allowance claims. For our retail clients this might include the fitting out of a storage space, head office or new shop unit. Our practical approach balances benefit and risk to ensure capital allowance claims are robust and compliant, as well as deliver value to either reduce taxable profits or increase taxable losses.
Learn more on our Capital allowances services page
We also help some of our retail clients to benefit from R&D tax relief. In our experience many companies, especially those outside the technology and science sectors, do not realise that R&D tax relief claims are available to them. Any company that is looking to develop a new process or product or improve either of these aspects may be entitled to make a claim. Retail businesses are often trying to innovate and develop processes to drive efficiencies and reduce costs and this often provides an opportunity to make a claim.
Explore the opportunities with R&D Tax Incentives
Our compliance services for retail and e-commerce clients are conducted under a variety of frameworks that are based on international standards. As a result the services we provide can be tailored to the small, independent business to the larger, multinational entities.
Examples of the assurance services we provide include:
We use certain specialist IT audit tools including Inflo and Datasnipper to assist in the efficiency and quality of our audit and assurance services combined with our specialist knowledge gained from working with retail and e-commerce businesses.
We work with a number of retail businesses that are part of global groups providing advice and compliance services. We provide annual corporation tax compliance and for businesses of a certain size we also provide support on additional compliance obligations including the Senior Accounting Officer (SAO) regime, Country by Country Reporting, and the requirement to publish a UK tax strategy to name a few. Our tax specialists assist clients to negotiate these further compliance areas.
Take a look at our tax risk tool to understand your businesses tax risk and identify the steps necessary to reduce them by completing our Tax Integrity Scorecard. Learn more about our Tax Integrity services.
In addition to helping clients best manage their UK VAT registration filing obligations we can also help with obtaining and managing EU One Stop Shop (OSS) and Importers One Stop Shop (IOSS) registrations. These registrations help businesses to account for VAT due in all 27 member states via one return submitted under a single registration number. Retailers benefit from these in the following situations.
The EU Commission recently stated that over €8billion of VAT was collected via those simplified registrations in the first six months of their operation (they became effective from 1 July 2021).
These registrations don’t allow for local EU VAT registrations to be avoided in all situations. However, we have found that they can vastly simplify accounting for the majority of businesses. Please contact us or your normal Crowe contact to arrange a call to discuss how these options might benefit your business.
We provide our retail and e-commerce clients with a range of corporate finance services across the company lifecycle, from refinancing and restructuring to realisation events. The common theme is always value maximisation, which we achieve by applying our deep understanding of the commercial factors affecting the retail industry, including fashion trends, supply chains, working capital and fulfilment/logistics.
Our corporate finance team comprises over 10 partners and 50 professionals who specialise in the following areas:
We often work with subject matter experts from across the firm to deliver integrated advice that helps our clients to mitigate risks, solve problems and realise value.
We provide an end to end spectrum of risk services to the retail sector, either on a one off or outsourced basis. Our services include:
We provide fully outsourced or co-sourced internal audit services working in partnership with the organisation, including providing interim solutions, such as Head of Internal Audit roles. In addition, we have experience in the start up of internal audit functions, including initial set up, structures, communication plans and Audit Needs Assessment (ANA) processes to determine the internal audit plan.
This can include a full audit programme considering corporate systems (examples include financial systems, people related processes, such as recruitment, retention strategies, EDI (Equality, Diversion and Inclusion) and ESG (Environmental, Social and Governance). We also have a range of specialists to complete technology assurance related assignments, including Cyber Risk (covering Cyber Essentials, ISO27001 and NIST Frameworks), Project and Programme Assurance, Systems implementation and IT Change management.
In addition, we can undertake programmes of targeted internal audit work across the retail estate. This can be based on an established compliance programme or utilising data analytics to prioritise internal audit onsite work.
We can undertake support projects to establish the systems and processes required to address the requirements of GDPR/ DPA 2018, including gap analysis, policy and procedural framework development, systems implementation and staff training.
In addition, we undertake compliance audits to assess compliance with the policy and procedural framework across the retail estate, including checks upon staff awareness of requirements and data retention compliance.
We can assess the overarching approach to TPRM, including understanding the frameworks and mechanisms which have been established, from supplier appointment, due diligence and onboarding through to contract management.
In addition, we can be utilised in a second line capacity to undertake supplier audits, both in terms of compliance with contractual terms, supplier performance and pricing application.
As consumer demand evolves at a fast pace, retailers are faced with range of challenges - but also many opportunities. Finding the right balance can be hard, but necessary to sustain the business and growth.
Helping to deliver that sustainable change, and capitalising on what is important in this rapidly changing market, is what our industry experts do.
Our latest thinking
Plan ahead for the financial pressures expected from 1 April 2023
Indirect tax considerations for overseas businesses trading with the UK
VAT in the Digital Age
Plastic Packaging Tax: HMRC attempt to increase number of registrations
Have retailers fallen into post-Brexit compliance traps?
International tax and ESG
Landlords and Tenants
Plastic Packaging Tax: the challenges and what we know so far
Changes to UK customs declarations
We care about your business. Close working relationships are at the heart of our service delivery which sees our clients stay with us year after year, trusting us for our specialist advice and open dialogue.
We understand your needs. Our expertise, market knowledge and access to professionals across our global network means we are well placed to offer insight and pragmatic advice to your business.
We help you to make smart decisions that have lasting value. Working with you, we will help you to successfully adapt and overcome challenges in your sector, both today and in the future.