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
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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

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  • 30 Mar 2026 10:39

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

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