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Strategy with a wide-angle lens ...


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Chartered accountants Haines Watts presents a series of articles based on its blogs. It offers analysis, reviews and comments and welcomes your feedback at hwca.com/blog


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Brexit, VAT and the future


writes Adam Lloyd, VAT consultant, Haines Watts henley.ac.uk/open


In a world where uncertainty and disruption are norms, it is vital that companies and their strategic advisers widen their strategy lens and further refine their strategy development skills


When iTunes came into the music industry, it caused massive disruption overnight. It took an outsider to say: “There’s fat in the music industry and we can do this differently.”


Airbnb emerged from the dematerialisation movement, aided by new technology; two guys had space in their apartment and trouble paying their rent. They transformed the hospitality business, but also launched a growing industry of collaborative consumption ideas.


Similarly, 3D printing is reducing manufacturing waste, capital employed in inventory and just-in-time supply. And Google Earth threatens to make 20 years of research obsolete by the rise of electric cars, with sophisticated car cameras set to revolutionise landscape mapping, whilst Volkswagen and other manufacturers will soon be selling real-time information to transport ministries on the location of pot holes on our roads.


Diana Richards 01491 418767 exec@henley.ac.uk henley.ac.uk/strategy @HenleyExecEd


THE BUSINESS MAGAZINE – OCTOBER 2017 Strategy can be a leadership tool


So how can we avoid becoming someone else’s next opportunity?


Companies need to work harder to align strategy with market conditions. While Blockbuster failed to change with the market, Netflix transformed itself. The rise of streaming could have put Netflix out of the game, but it knew its customers and market, and adapted.


Is your data out of date?


Strategy planning can no longer be an annual thing. The shelf- life for information is getting increasingly shorter, so whilst some organisations operate without a strategy, still delivering on narrow, inward-looking plans, the industry moves on.


Henley’s Strategy Programme enables senior executives and board members to further develop their skills, identify obsolete business models and understand how to use strategy as an essential analytical and leadership tool.


The 2016 Brexit vote had a significant impact on the world economy. Much has been made of the ‘hard vs soft’ Brexit but at the time of writing it looks like ‘hard’ may prevail.


The Government recently announced that free movement of people will finish post Brexit and it’s therefore highly likely that the free movement of goods will also end. If this happens, we’d see a return to all incoming and outgoing goods being cleared via the same procedures that are currently applied to non- EU shipments. Administrative procedures such as EC sales lists and Intrastat returns would also stop.


Europe’s reach will therefore end at the British Channel and neither the UK taxpayer nor the Government will be forced to follow future European Court of Justice rulings.


VAT will be under the sole jurisdiction of the UK Government and lawmakers going forward and, while existing EU case law precedent is to be preserved within UK law, it remains to be seen whether some of these decisions will withstand fresh challenges once the CJEU no longer has the final word.


Leaving the EU may allow a raft of ‘common sense’ rules to be introduced in the UK that aren’t permitted currently. For instance, the Government could remove VAT on feminine hygiene products, which isn’t allowed under EU Law.


With the threat of financial institutions relocating outside the UK, now would be an ideal time to start talks on the potential VAT benefits and supplier advantages of staying put. Furthermore, the UK exemption for financial products and other services may end at the UK borders, bringing VAT savings to exempt service providers who offer cross-border products.


The post-Brexit VAT world remains unclear but one thing is for sure, VAT is here to stay. It’s the second highest source of Government revenue and the ultimate stealth tax. Watch this space.


For further information: hwca.com


businessmag.co.uk


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