Food and Drink

The Food & Drink sector is one of the UK's great success stories of recent decades being one of the largest manufacturing sector in the country, bigger than automotive & aerospace combined. The South West of England is an integral part of that growth story with its rich food and drink culture. Last year exports of Food & Drink increased over 4% and were valued at over £800m according to latest HMRC figures.

Bishop Fleming provides ambitious food and drink businesses with collaborative insight that adds genuine and relevant value to growing businesses in our regions. We achieve this through our gained expertise from a diverse range of food and drink clients many of whom are nationally and internationally recognised.

The Food & Drink sector is a dynamic and complex business environment which is constantly changing whether that be consumers tastes and trends, economic and regulatory environment, supply chain, funding or labour supply & minimum wage.   

By having a dedicated specialised Food & Drink team with a wealth of expertise and experience accumulated from time spent working with sector clients we’re able to pro-actively give advice providing a collaborative experience that simply can’t be matched.  

Meet our full team.

How we can help with food & drink expertise

International Tax

We have an experienced team of international specialists who advise our food and drink sector clients on a wide range of international tax matters, including cross border transactions, structuring overseas expansion tax efficiently and helping our overseas clients investing in the UK to navigate UK tax requirements and access UK tax reliefs. We provide international VAT, corporation tax and employment tax advice and keep our food and drink sector clients updated on Brexit developments, advising them on its implications and restructuring for the post-Brexit landscape.

VAT

The current UK VAT rules relating to food and drink are complex and can be difficult to understand. There are three main areas of complexity:

  • Catering – food and drink which is sold as part of a supply of catering is always treated as a standard-rated supply for VAT. For example if you buy a sandwich in a café and choose to “eat in” so that you sit at a table, then this supply will be standard-rated for VAT, while if you take the sandwich away, then the supply will be zero-rated. There has been considerable debate and caselaw about the extent of the “premises” within which you are treated as “eating in” rather than taking away, eg airports etc.
  • All takeaway food is standard-rated if it is served hot, unless it happens to be hot because it has just been cooked and has not been kept hot after cooking or advertised as “hot food”. This became a “hot” issue following proposals in the 2012 budget to tax certain products just as pasties which are traditionally served hot.
  • In addition, there are certain foods which are always subject to VAT even when not part of a supply of catering. These foods include ice cream, crisps, confectionery,etc. In some cases, especially when new products are developed, it can be difficult to determine whether they are subject to VAT or not. There are a number of famous cases on this issues, the most famous being Jaffa Cakes, which were determined by the courts to be zero-rated as cakes rather than standard-rated as chocolate biscuits.

We have wide experience in reviewing the VAT treatment of catering and other supplies of food and drink and negotiating with HMRC to get good results for our clients.

Audit & Accounts

We believe an audit is more than a tick in a box.  As auditors we are in a hugely privileged position to bring true insight to both management and key stakeholders.  With higher data volumes and the shift from manual to automated processes, we have developed sophisticated data analytics tools to derive more value from the audit process.  

Our data analytics tools use your business data to perform complex interrogation routines.  Results from these procedures are presented in easy to understand “dashboard” style visualisations. With a diverse range of food & drink clients we are able to benchmark data against our expectations so that meaningful and relevant conclusions can be drawn.

We have embraced technology by using a secure portal to seamlessly exchange information with our clients and were one of the first Top 40 UK accountancy firms 

to invest in some of the most sophisticated audit and accounting software around and have been working with CaseWare nearly 10 years. Our level of involvement in the design and development of the CaseWare programme itself has given Bishop Fleming unrivalled experience, which can be drawn upon should you need assistance in the preparation of your statutory accounts.

Systems, Processes & Controls

Due to the variety and size of our Food & Drink clients we have a wealth of knowledge on the accounting systems they operate whether that be Xero, SAP, Netsuite or anything bespoke, legacy or inbetween.  

We have also helped numerous clients review controls around the financial reporting process, including financial business process and IT management controls for both audit and non audit clients. This can assist with understanding better the internal control environment, aiding with workforce management or getting ready to implement new systems.  Some of the services we can provide include:

  • Deep dive on your processes and systems 
     
  • Detailed documentation setting out how your key processes work, particularly in terms of using existing accounting systems
  • Review of similar financial processes identifying any efficiencies
  • Review of manual journals and understanding why the process is so manual and recommendations to reduce reliance on data entry
  • Report setting out key recommendations for management on overall efficiency of the finance function, areas for improvement, effectiveness of current IT systems and other suggestion
Funding

We are experienced in advising on raising new debt for acquisitions, capital expenditure, working capital or anything else. We can assist in identification of and liaison with potential lenders, preparation of forecasts & business plans, presentations to lenders, negotiations with lenders and financial and commercial input to legal documents. We can also identify sources of equity funding for Food & Drink businesses, from those needing start up capital, through to those established businesses looking to fund expansion. We can assist in the presentation to potential funders, establish an indicative valuation for the business and assist in negotiations with funders. We can do what is required to ensure that the business gets the funding it needs to reach its objectives.

Tax compliance

We offer a full, holistic tax compliance service to our food and drink sector clients including corporation tax compliance, payroll services, annual P11d returns, VAT returns and company directors’ personal tax returns.  We provide an efficient and cost effective compliance service ensuring our food and drink sector clients’ tax compliance obligations are met. At the same time, we provide pro-active advice on minimising tax liabilities, accessing tax reliefs and tax efficient remuneration planning for both owner managers and their employees.

Strategy

We can assist the Board of a company over time in long term strategic decision making. Utilising our diverse Food & Drink sector expertise we can ask the hard questions, sometimes providing the unpopular view. We can help identify what the owners and directors want out of the business, and help with the implementation of long term plans.

R&D Tax

A vast number of new products are developed by the food and drink sector and many food and drink businesses are involved in other innovation, such as the development of new production methods or state of the art packaging. We advise our clients on their eligibility to access R&D tax relief and work with them to maximise the relief available, realising valuable cash savings. 

Transaction advice

We provide a life-cycle service for businesses in the Food & Drink sector. For businesses looking to expand by acquisition we provide a full lead advisory service to ensure the right deal actually happens. We can assist with finding targets, raising finance, negotiating the deal and efficiently and effectively project managing the transaction to completion. We can also provide due diligence services, evaluating the financial and tax aspects of the acquisition, and assist with post-transaction acquisition integration.

For shareholders considering their succession plans, we can assist in assessing strategic options, preparing the business for sale, researching the market and finding potential buyers, negotiating the best deal, providing commercial and financial input to the legal process and project managing the transaction to completion.

Brexit

If the UK leaves the EU without a deal then there will be significant implications for the movement of food products between the UK and the EU. In addition to requirements for inspection for certain animal products, there will also be new duty costs.

Food and drink products moving from the UK into the EU after a no deal Brexit will be subject to significant customs duty costs, as will be several food products moving into the UK from the EU. This is likely to have the effect of making some food products more expensive in the UK, and will also make UK produced food more expensive in the EU which is likely to make these products less competitive.

The delays caused by increased requirements for documentation and inspections will also cause delays at the ports which will impact on perishable/chilled products in particular.

If a free trade agreement was reached between the UK and the EU the duty costs and potentially also the inspection requirement would be removed.

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