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This guidance note provides an overview of the main VAT principles governing the use of retail schemes. This note should be read in conjunction with the following guidance notes:

1. •

   Retail schemes ― point of sale

2. •

   Retail schemes ― apportionment

3. •

   Retail schemes ― direct calculation

4. •

   Bespoke retail schemes

5. •

   Retail schemes ― specific industries

6. •

   Retail schemes ― daily gross takings (DGT)

VATA 1994, Sch 11, para 2(6); SI 1995/2518, regs 66–75; De Voil Indirect Tax V3.551–V3.576

Retail schemes are intended to be used by businesses that cannot be expected to use the normal invoice accounting rules for supplies made. The scheme can only be used for retail sales. Retail schemes are usually used for low value supplies that are made to significant number of customers. If a business makes retail and non-retail sales, it will be expected to be able to identify both types of supply in order to account for VAT in the normal way on any non-retail supplies made.

Sales to other VAT registered customers