Retail schemes — Apportionment | Tax Guidance

Retail schemes — Apportionment

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Value Added Tax

Guidance

This guidance note provides an overview of the rules relating to Apportionment retail schemes 1 and 2. This note should be read in conjunction with the Retail schemes - overview and Retail schemes - specific industries guidance notes.

A business making retail sales can use a retail scheme if they cannot use the normal accounting rules and their turnover does not exceed £130m a year.

The retail scheme used by the business must produce a fair and reasonable result and the business must be able to identify the tax exclusive value of the sale, the applicable VAT rate and be able to produce periodic totals of those amounts.

Overview of the appointment schemes

There are two apportionment schemes that can be used and these have been outlined below.

Apportionment scheme 1

This is the simpler version of the two apportionment schemes and can be used by businesses with a tax exclusive turnover that does not exceed £1m. Businesses using the scheme need to calculate the total value of purchases made at each VAT rate and calculate

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