Bespoke retail schemes

Produced by Tolley

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

  • Bespoke retail schemes
  • Bespoke agreements
  • Obtaining agreement
  • Amending bespoke agreements
  • HMRC withdraws permission to use a bespoke scheme
  • Withdrawing agreement to use part of a scheme
  • Daily Gross Takings (DGT)
  • Adjusting the DGT
  • Types of bespoke agreements
  • Point of Sale scheme (POS)
  • More...

Bespoke retail schemes

IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marked the end of the Brexit transition / implementation period entered into following the UK’s withdrawal from the EU. At this point in time, key transitional arrangements came to an end and significant changes began to take effect across the UK’s VAT and customs regime. This document contains guidance on subjects potentially impacted by these changes. Before continuing your research, see the Brexit — overview guidance note.

This guidance note provides an overview of the bespoke retail schemes. This note should be read in conjunction with the Retail schemes - overview guidance note.

The following businesses may need to use a bespoke retail scheme:

  1. businesses that are VAT registered

  2. businesses that make retail sales

  3. businesses that cannot use the normal VAT accounting rules, and

  4. businesses with an annual taxable VAT exclusive retail turnover exceeding £130m

A bespoke retail scheme is a method implemented by retail businesses in order to identify output VAT due on retail sales. Bespoke retail schemes are usually based on a standard retail scheme that has been specially tailored to meet the specific business requirements. Due to the rapid advancement of information technology, electronic tills are now very sophisticated and can normally determine the correct VAT rate that is applicable to each item at the time it is sold by a retailer. Therefore the majority of larger retailers would use a bespoke point of sale retail scheme in order to account for VAT due on their retail sales.

If the business makes internet sales in the UK, the sales record will normally enable the business to account for VAT correctly on the sale. However if the business can provide satisfactory evidence to HMRC that it cannot account for VAT using the normal accounting rules, it may allow the business to include these sales in its retail scheme calculation. See the Retail schemes - specific industries for more information on mail order.

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