Retail schemes — Apportionment

Copyright © 2026 LexisNexis
Produced by a Tolley Value Added Tax expert
Value Added Tax
Guidance

Retail schemes — Apportionment

Copyright © 2026 LexisNexis
Produced by a Tolley Value Added Tax expert
Value Added Tax
Guidance
imgtext

This guidance note provides an overview of the rules relating to the apportionment retail schemes. 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 VAT exclusive 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. Although both use broadly the same mechanism (an apportionment between different VAT rates) apportionment scheme 1 analyses the proportion of purchases at different VAT rates and applies this ratio to sales, whereas scheme 2 uses the expected selling price of goods received for retail sale as the basis for apportionment.

Apportionment

Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, generative tax AI, and tax research, register for a free trial of Tolley+™
TAKE A FREE TRIAL NOW
Powered by Tolley+™
  • 30 Mar 2026 10:39

Home/ Tolley Tax Guidance/ Value Added Tax / Choosing and operating a special VAT scheme

Popular Articles

Owner-Managed Businesses

Allowable expenses for property businesses

Allowable expenses for property businessesGeneral itemsMany of the principles applying to allowable expenses for property businesses are similar to those that apply for trading and the rules for individuals in a property business are generally the same as for companies with some exceptions which are

14 Jul 2020 13:26 | Produced by Tolley in association with Rob Durrant-Walker of Crane Dale Tax, part of AMS Group Read more Read more
tag-icon Tax Returns
Employment Tax

Long service awards

Long service awardsEmployee recognition by an employer can be an important motivational tool, as well as having a positive effect on retention. Most employer awards made to an employee are treated as taxable earnings under ITEPA 2003, s 62 or as a benefit under ITEPA 2003, s 201 because they are

14 Jul 2020 12:11 | Produced by Tolley Read more Read more
Employment Tax

Loans written off

Loans written offCompanies sometimes provide directors, employees or shareholders with low interest or interest-free loans either as part of the reward package or on special occasions to help the individual meet significant expenditure. The employment income implications of these loans are discussed

14 Jul 2020 12:11 | Produced by Tolley Read more Read more