The Group regards this publication as complying with its duty to publish its Group Tax Strategy for the year ended 31 December 2018 in accordance with current tax legislation.
This publication covers all legal entities of the Dick Lovett Group as listed below:
- Dick Lovett Companies Limited
- Dick Lovett Limited (comprising Porsche Centre Bristol, Porsche Centre Cardiff, Porsche Centre Swindon and Porsche Centre Tewkesbury)
- Dick Lovett (Hungerford) Limited (comprising Dick Lovett BMW Hungerford and Dick Lovett MINI Hungerford)
- Dick Lovett (Bristol) Limited (comprising Dick Lovett BMW Bristol, Dick Lovett BMW Motorrad Bristol, Dick Lovett MINI Bristol and our Bristol Bodyshop)
- Dick Lovett (Bath) Limited (comprising Dick Lovett BMW Bath, Dick Lovett MINI Bath and our Bath Bodyshop)
- Dick Lovett (Specialist Cars) Limited (comprising Dick Lovett BMW Swindon, Dick Lovett MINI Swindon and our Spraymaster Bodyshop)
- Dick Lovett (Avon) Limited (comprising Dick Lovett Jaguar Bath and Dick Lovett Land Rover Bath)
- Dick Lovett (Sporting) Limited (comprising Dick Lovett Ferrari Swindon and Dick Lovett Maserati Swindon)
- Dick Lovett (Sports Cars) Limited (comprising Aston Martin Bristol)
General approach and use of third party advisers
It is the Group’s policy to comply with HMRC rules concerning all forms of taxation while taking advantage of accepted and efficient practices for minimising the cost to the business. However, the Group does not take part in any tax avoidance schemes. The Group takes specialist advice from the taxation department of its auditors as and when appropriate.
Business tax arrangements
Corporation tax is a significant cost to the company. Advantage is taken of group relief for losses where applicable as well as careful examination of the potential for claiming capital allowances on new expenditure which can be considerable in the case of new buildings. The Group employs specialist advisers to compute such claims. The Group also carefully examines all potentially disallowable expenditure for such things as entertaining customers so as to ensure the correct disallowance of the relevant amounts.
As regards PAYE and national insurance contributions, the Group operates standard practices for its payroll. In the case of benefits in kind these are carefully monitored and reported to HMRC in the normal way. The Group also has in place a PAYE Settlement Agreement whereby it can pay tax on behalf of an employee if it wishes to reward the employee without the employee bearing additional tax thereon.
VAT is a major issue for the Group. One area which is difficult for the Group is where cars are either imported or exported to or from the UK. The Group has in place detailed practices whereby every such transaction is carefully examined by one specific person who is well versed in these special rules so as to ensure the correct VAT treatment.
The Group also has to account for VAT on both the Partial Exemption Method and the Capital Goods Scheme. One specialist in the Group carries out these calculations on a quarterly basis so as to ensure the correct disallowance of the relevant amounts.
Moving forward into 2019 one of the focuses of the Group will be how to develop our systems to report VAT to HMRC as part of the roll out of Making Tax Digital. As the Group are required to work with several manufacturers’ dealer management systems on a day to day basis then this is likely to involve sourcing appropriate third-party software to ensure HMRC deadlines are met.
Overall monitoring of the Group’s taxation affairs
The Group Finance Director (who is a chartered certified accountant) takes overall responsibility for ensuring the Group’s compliance with all taxation rules and regulations. He keeps in close contact with the Group’s external advisers and also monitors the actions of the teams under him on a regular basis. He has in place a detailed set of systems and procedures covering all aspects of how the business is run from a financial point of view including tax matters where relevant.
The Finance Director keeps in regular contact with the Customer Relations Manager at HMRC for a discussion about any relevant matters that may have come to light during the year and any new regulations which might have an impact on the Group and aims to hold a meeting with that person at least once a year.