We have worked with retail groups operating in multiple countries to design and implement a streamlined, tax-efficient operating model. By leveraging our expertise in transfer pricing, customs duty compliance, and tax planning, we support retail groups in aligning their financial and operational processes with international requirements, whilst identifying significant savings opportunities.

MENZIES’ STRATEGIC APPROACH & SOLUTIONS

1) For a group operating in multiple countries, we highlight the client’s current flow of goods against the proposed flow of goods under their new operating model to illustrate where potential tax and customs duty savings could be achieved.

2) We then advise on a tax efficient “future proofed” transfer pricing model, taking into account their expected operational changes. This included a full Functional Analysis Review (FAR) being documented which looks at key functions, assets and risks in each entity/country, and advising on a tax efficient model for operating in the EU.

3) We offer full end to end transfer pricing services, including benchmarking intercompany product prices since the transfer price was to potentially be used as the basis for customs valuation.

4) We then advised on the various valuation methods for customs duty purposes when moving goods around the world. This included supporting groups in selecting the most appropriate method for each jurisdiction to minimise costs and ensure compliance.

5) We recommended processes for monitoring and managing customs duty procedures to ensure that any under or over payments of customs duty can be minimised. This is also to ensure our clients could demonstrate well-controlled processes in the event of enquiries from tax authorities.

6) We worked with our HLB Network firms across the world to ensure that all local law requirements, including compliance and reporting requirements, were understood and appropriately planned for.

7) Wider tax issues were considered so that the customs duty and transfer pricing issues were not looked at in isolation. These included VAT and sales tax, Permanent Establishment risks, and withholding taxes on cross-border payments.

Our holistic approach enables multinational groups to successfully navigate the complexities of cross-border operations. By combining technical expertise, global coordination, and strategic tax planning, we help groups achieve compliance, unlock savings, and build a framework for future growth. This case study demonstrates our commitment to delivering integrated, value-added solutions to meet the unique needs of multinational businesses.

We can assist clients by working in partnership with them to establish tax efficient product flows for movements of their goods especially where operating models may be changing (e.g. new markets being explored, new routes for moving goods, new warehouses being opened etc).

Our approach:

1) To consider the current model: Is too much customs duty being paid? Can a different valuation method be used which will result in duty savings?

2) To review how the customs duty policies and procedures are being managed and monitored. What are the risks and opportunities?

3) To evaluate a Group’s transfer pricing policies and consider whether these are both tax efficient and future proofed given any expected business changes.

4) To advise a Group on any recommended changes to transfer pricing policies; any benchmarking needed to support the transfer pricing policies; and what reporting and documentation is needed in all relevant jurisdictions.

5) To consider other associated tax matters, for example, VAT and sales tax implications; global mobility and permanent establishment issues if key employees work across different jurisdictions; withholding tax issues on cross-border payments; optimal financing structures etc.

We have worked with leading online retailers in the UK that provide unique products locally and worldwide via wholesale to shops, online stores, and individual consumers.

MENZIES’ STRATEGIC SOLUTIONS & OUTCOMES

Through close collaboration, a structured approach, and a clear understanding of the client’s objectives, we can help deliver key solutions to address the challenges facing retailers.

1. We can help clients keep their accounting records up to date, significantly reducing time spent on financial tasks that are done manually, such as updating Excel documents.

2. We can support clients with their Customs Declaration Service, C79 certificate, and Postponed Import VAT Accounting (PIVA) to streamline their VAT returns.

3. We can assist clients with the reconciliation of their accounts, such as PayPal and bank accounts, to ensure their balance sheets accurately reflected their financial activity.

4. We can provide support to ensure clients manage and track their business performance and cashflow forecasting, such as creating monthly management reports.

5. As part of our ongoing strategy to help improve our clients’ systems and processes, our Digital Transformation team can discuss the best solutions to transition to cloud-based inventory management software.

ADDITIONAL SUPPORT PROVIDED TO RETAIL CLIENTS

Our joined-up approach means we liaise with other departments across the firm to ensure our clients received a comprehensive service offering. Retail assignments may need to draw upon expertise from departments, including:

Tax: Guidance provided for both personal and corporate tax compliance.

VAT: Providing clients support with VAT compliance and preparation of VAT returns.

PAYE: Addressing payroll issues and resolving outstanding HMRC payments.

Systems advisory: Collaborating with clients to transition their operational efficiencies, such as stock management, are improved by implementing the best systems suited for their business needs.

IN SUMMARY

Our clients’ journey highlights the importance of a proactive and collaborative approach in addressing financial and operational challenges. Through our integrated services and strategic support, we’ve enabled our clients to focus on expanding their businesses while maintaining compliance and financial clarity. This case study demonstrates our ability to add value as trusted advisors to rapidly growing businesses withing the retail and e-commerce industry.