V3.565 Retail catering scheme

Regulations1 made under VATA 1994 Sch 11 para 2(6), provide for HMRC to issue a Notice2 describing methods to be adopted by retailers who make supplies at other than the zero-rate. One such method3 applies to businesses providing supplies of catering4. The catering scheme is only available for caterers which expect their annual turnover for the next 12 months to remain below £1 million5. In Mithras6, the relevant turnover exceeded this figure, and the tribunal was required to consider whether the apportionment of turnover applied by the appellant was an agreed method under SI 1995/2518 s 67(1) (see V3.553). Despite the fact that no formal agreement existed, the tribunal considered that:

“If one looks at the evidence as a whole which includes the completion of the various VAT forms, the understanding of the Appellant, the representations made in writing by the HMRC officers, details of the meeting taken by the accountant as well as the officer's handwritten notes, there is a binding agreement between the parties to operate a retail scheme pursuant to regulation 67(1) of the VAT Regulations. Given that the

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