Retail

What are the issues?

VAT is a tax on final consumption – and retailers are at the sharp end of VAT collection. Although retailers only collect VAT on behalf of HMRC, since all retail prices are VAT inclusive, in effect output tax is a direct cost to the business.

If you are a retailer many factors affect the amount of VAT you pay out of your income.

VAT rate

The UK has an unusually large range of zero and reduced rated goods – and the law governing which rate applies is notoriously difficult to interpret. But that’s where we come in. We’ll cut through the complexity and help keep you on the right track.

Point of sale systems

Most retailers use a point of sale system to capture information on sales, using it to identify how much VAT is due. However, these systems don’t always calculate VAT in a way acceptable to HMRC, often resulting in a higher figure that is necessary. We will work closely with you to help adopt the best approach for your business and if you’re a larger retailer with turnover over £130m pa you’ll need to document this in a Bespoke Retail Scheme. Our experience will ensure you aren’t paying out more than you need to.

Promotions

Given fierce competition on the high street and on the web, retailers need to constantly innovate their promotion schemes to encourage customers to remain loyal to their brand. We know that designing a promotion scheme can significantly affect the amount of VAT a retailer pays, which is why we’re on hand to advise you on the best and most effective options for your business – and your customers’ needs.

Where your customers are located

The UK has one of the most mature online retail sectors, with many retailers selling to customers across Europe and beyond. With this brings a range of complex VAT issues, with retailers currently required to register for VAT in other countries once sales there go above a small annual threshold. Managing your VAT overseas can be a daunting task, but we’re on hand to help, providing expert support every step of the way.

Financial services

Many retailers generate VAT exempt income from financial services, payment services or insurance. We can help you deal with the impact of this on your business including advising you on a practical partial exemption methodology.

How can we help?

Alison Carey has over 24 years’ experience advising retailers on their VAT issues from the largest high street and internet retailers to growing and mid-tier businesses. She can help to identify whether you are accounting for VAT on your sales in the most appropriate manner to minimise your VAT cost and in accordance with your retail scheme, and in drafting a Bespoke Retail Scheme where one is required.

Alison can help you manage your VAT position effectively and her reviews invariably identify ways to reduce your VAT cost.