V3.574 Bespoke schemes

Bespoke retail schemes are designed for businesses which are ineligible to use the standard schemes described above1. Relevant information is given in Notice 727/2/202. Retail businesses with an annual turnover exceeding £130 million (prior to 1 April 2009, £10 million) are obliged to use a bespoke scheme, or to account for tax normally. A business with an annual turnover below this level is not prohibited from using a bespoke scheme. A bespoke scheme is individual for each retailer and has to be agreed with HMRC3.

Following the tribunal decision of Tesco plc4, a bespoke scheme is a legally binding contract between the taxpayer and HMRC. Consequently, a bespoke scheme has to be agreed in writing, incorporating the following information5:

  1.  

    •     a legal framework statement;

  2.  

    •     the start date and (if both parties agree) end date of the agreement. The agreement will specify how output tax will be calculated in any period covered by the agreement;

  3.  

    •     details of supplies which will be accounted for within a bespoke scheme, and of those which will not form part of the scheme and will therefore be accounted for normally;

  4.  

    •     any items in the Daily Gross Takings (DGT) tables in Notice 727/2/20 section 7 and 8 which are appropriate to the method of valuing taxable

To continue reading
View the latest version of this document, as well as thousands of others like it, sign in to TolleyLibrary or register for a free trial