VAT Standard Retail Schemes

VAT retail schemes are a special set of schemes used by retail businesses to account for VAT.  The schemes are usually used by businesses that sell a significant amount of low value and/or small quantity items to the public with different VAT liabilities.

The use of the scheme can save businesses a significant amount of time in calculating the amount of VAT due to HMRC on each and every sale. In many circumstances it would be extremely difficult for these businesses to account for VAT using standard VAT accounting. By using the VAT retail scheme, retailers are able to calculate VAT due to HMRC at the standard, reduced and zero rates of VAT as a proportion of sales. Usually this is done on a day by day basis.

There are 3 standard VAT retail schemes:

  • Point of Sale Scheme
  • 2 x Apportionment Schemes
  • 2 x Direct Calculation Schemes

There is also the option of using a bespoke scheme. The use of a bespoke scheme is obligatory for retailers with a turnover excluding VAT of £130 million or more. The decision as to which retail scheme to be used is usually driven by a combination of looking at the scheme that provides the best result for the business and the cost of using the scheme. Note, HMRC need to be of the opinion that the chosen scheme is fair and reasonable.

Posted in Value Added Tax

Exeter Accountant MJ Smith & Co

Celebrating 25 years of excellence.

Free 1st Meeting
Fixed Fees
Free Support!

Find out more

Client Portal Login: Onvio

Forgot Password?

Latest News

X-factor Charity single

The Government will waive the VAT equivalent on the sales of this year’s X Factor Celebrity Christmas Charity single. All …
Read More

When National Insurance Credits can be claimed

National Insurance credits can help qualifying applicants to fill gaps in their National Insurance record. This can assist taxpayers to …
Read More

Inheritance Tax Agricultural Property Relief

There are a number of reliefs available that can reduce liability to IHT. The most relevant for farmers is the …
Read More