Retail schemes ― direct calculation

By Tolley

The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Retail schemes ― direct calculation
  • Overview
  • Calculations
  • Annual adjustments
  • DGT
  • Specific transactions
  • Adaptations

This guidance note provides an overview of the two Direct Calculation retail schemes and should be read in conjunction with the Retail schemes – overview and Retail schemes – specific industries guidance notes.

SI 1995/2518, pt IX, regs 6675; VAT Notice 727/5 ; De Voil Indirect Tax Service V3.573; VRS1000 

Businesses can only use this scheme if the total retail turnover does not exceed £130m per annum. If the total turnover exceeds this threshold the business will need to agree a bespoke retail scheme with HMRC. See the Bespoke retail schemes guidance note for more information.

The following thresholds apply to businesses wishing to use a Direct Calculation scheme:

SchemeTurnover limit
Direct Calculation scheme 1

More on Retail schemes: