The Scottish food & drink sector generates a turnover of £13.1bn and is predicted to generate £16.5bn by 2017, meaning this sector will continue to be a vital part of Scotland’s economy.
With an ever-growing global population, and increased wealth in developing economies, demand for quality produce has never been higher. As a result, the export market will become increasingly important for food and drink producers. Scottish food and drink exports totalled £5.3bn in 2012, and with a target of £7.1bn in 2017 it is vital that food and drink producers are in good financial shape to meet export demand.
As active members of Scotland Food & Drink, our team has considerable knowledge of the sector and works closely with clients to help maximise growth and support their plans in the UK and abroad. Our international connections, through MHA, provide clients with access to specialist advice in 137 countries.
Some of the ways in which we help food and drink businesses are obtaining tax savings via R&D credits, identifying VAT saving opportunities, assisting with securing capital investment, as well as helping with day to day bookkeeping and accounts production.
As a result of many years’ experience in working with HMRC, we have the knowledge to ensure businesses are fully compliant and are fully prepared for any tax inspection. Several of our staff also have first-hand knowledge of VAT inspections from time spent working for HMRC, and we have an in-depth knowledge of the penalty regime and how to ensure compliance in a wide range of circumstances.
Our work in this sector
One of our clients produces cakes, biscuits and confectionery for hotels and coffee shops. One of their main customers is a national hotel and coffee shop chain who insisted that VAT should not be applied to any of the products supplied to them. Given the complex nature of VAT liability with such products, our client sought advice on how best to meet the demands of their customer.
We suggested a comprehensive review of all existing products to ensure these met the criteria set out by HMRC to qualify for zero rated VAT, and a review of all potential new products to ensure these also met the criteria, and, if not, how the product could be altered to qualify for zero rating.
Members of our food and drink team visited the premises to gather information on all existing and new products, obtained ingredient lists and then conducted reviews to ensure that everything met the relevant criteria.
The team successfully ensured that all products met the criteria and qualified for VAT zero rating, resulting in the client being confident that they could meet the demands of their major customer that VAT was not applicable on any of their products.