The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:
This guidance note provides an overview of the main VAT principles governing the use of retail schemes. This note should be read in conjunction with the following guidance notes:
VATA 1994, Sch 11, para 2(6); SI 1995/2518, regs 66–75
De Voil Indirect Tax V3.551–V3.576
Retail schemes are intended to be used by businesses that cannot be expected to use the normal invoice accounting rules for supplies made. The scheme can only be used for retail sales. Retail schemes are usually used for low value supplies that are made to significant number of customers. If a business makes retail and non-retail sales, it will be expected to be able to identify both types of supply in order to account for VAT in the normal way on any non-retail supplies made.
Sales to other VAT registered customers should not be included in the a retail scheme, unless these are occasional cash sales, provided by businesses who may supply goods to VAT registered customers, such as garages and DIY stores.
HMRC considers that the need to use retail schemes has greatly diminished over recent years with the advent of more sophisticated technology,
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