V3.563 Changing scheme

A retailer may cease to account for output tax on the basis of a retail scheme in three circumstances—


    (1)     he may wish to cease using his current scheme for some financial or administrative reason;


    (2)     HMRC may refuse to permit him to continue using his current retail scheme; and


    (3)     he may cease to meet the conditions of his current retail scheme due to a change in the legislation or a change in his trading pattern.

In each case, ceasing to use the current scheme may result in either adopting a new scheme or commencing to account for output tax on the VAT invoice basis.

General rule

Regulations1 made under VATA 1994 Sch 11 para 2(6) provide that—


    (1)     once a person has adopted a retail scheme, he must continue to use it for a period of not less than one year counted from the date of adoption; and


    (2)     a change of scheme must take place at the end of any complete year counted from the beginning of the prescribed accounting period

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