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What are the most important tax issues facing Aldi

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What are the most important tax issues facing Aldi supermarket chains at the moment?

Hello, I am Keith, one of the experts on Just Answer, and pleased to be bale to help you with your question.

You have identified VAT, but operating their payroll under PAYE and accounting for their profits under Corporation Tax (CT) seem the more obvious areas for management involvement. They also deal in alcoholic beverages so there is also liquor duty to contend with.

I do hope that I have been able to assist you with your question.

Customer: replied 9 months ago.
Hi Thanks for the prompt reply, but I was expecting a more descriptive answer i.e VAT/customs duties this is likely to affect them due to brexit? What about the increase in business rate? Is that not going to affect them as well? In CT what are the issues? I would also like more details in PAYE please?or may be I didnt rephrase the question correctly. I have got a meeting with them and I need to do a five minutes presentation on what I think are the most important tax issues for Aldi.Kind Regards
Christina Hingira

Well PAYE is an ongoing chore so just worthy of a passing mention. They may well outsource this, many organisations do.

Currently trading within the EU is a standard rated activity. When we leave then the whole ball game will change and sales become exports, zero rated. Also Customs will inspect all incoming commercial goods and impose import duties and VAT. It is estimated that Customs will need at least 5000 extra staff to undertake these duties. All these imposts will have to be paid before the goods are released from bond.

CT is about the only thing which will not change on Britexit, save, of course, for the rate.

I do hope that I have been able to shed some more light for you, Christina.

Customer: replied 9 months ago.
Hi thanks, ***** ***** of CT what about the changes which were introduced in April 2017, in terms of interest restriction and loss carried forward? Are these changes not going to affect them?

I would suggest that unless Aldi goes into another huge expansion that losses are an unlikely scenario. The Chancellor hopes to reduce CT to 17% by 2020. Interest can only be allowed up to 30% of net earnings from 2016.

Customer: replied 9 months ago.
Thanks so I don't need to mention those changes? I read somewhere that they will continue to invest heavily in distribution channels and their head office in Warwickshire. Also what about the the FX? As the pound has dropped? Is that not going to affect them? But I am not sure if that is tax issues?

It is not, but it may well affect them, worth a passing mention.

Any competent executive or director will be well aware of all these matters. You will be preaching to the converted, or to put it another way, teaching grandmother to suck eggs!

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