Retail schemes ― specific industries

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

  • Retail schemes ― specific industries
  • Catering adaptation
  • Retail Chemist adjustment
  • Florists
  • Mail order
  • Other trade sectors

This guidance note provides a brief overview of any retail scheme requirements that are specific to certain industry sectors. This note should be read in conjunction with the following notes:

  • Retail schemes ― overview
  • Retail schemes ― Point of Sale
  • Retail schemes ― Apportionment
  • Retail schemes ― Direct Calculation
  • Bespoke retail schemes
Catering adaptation

The standard schemes work on the basis that the VAT liability of the goods purchased will have the same VAT liability when they are sold. However, with food and drink, this is not necessarily the case, as the goods purchased may have been zero-rated when purchased but are liable to VAT at the standard rate when they are supplied due to the fact that they are supplied in the course of catering. Businesses using the point of sale scheme will be able to correctly account for VAT as the VAT liability will be determined at the time the goods are supplied. However, under the Direct Calculation and Apportionment schemes, the calculation is based on the VAT liability of the purchases made by the business. Therefore, these schemes cannot be used for catering businesses.

SI 1995/2518, reg 67; Notice 727 ; VRS8050

The catering adaptation should be used by businesses that cannot use the either normal accounting or the Point of Sale scheme and have a retail turnover of no more than £1m.

Conditions

The following conditions must be satisfied.

More on Retail schemes: