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:


    •     a legal framework statement;


    •     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;


    •     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;


    •     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

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