Retail schemes ― specific industries

Produced by Tolley

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

  • Retail schemes ― specific industries
  • Catering adaptation
  • Conditions
  • Calculating output tax due
  • Retail Chemist adjustment
  • Florists
  • Mail order
  • Bad debts
  • Other trade sectors

Retail schemes ― specific industries

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 a brief overview of any retail scheme requirements that are specific to certain industry sectors. This note should be read in conjunction with the following notes:

  1. Retail schemes ― overview

  2. Retail schemes ― Point of Sale

  3. Retail schemes ― Apportionment

  4. Retail schemes ― Direct Calculation

  5. Bespoke retail schemes

Catering adaptation

The standard schemes work on the basis that the VAT liability of the goods purchased will have the same VAT liability when they are sold. However, with food and drink, this is not necessarily the case, as the goods purchased may have been zero-rated when purchased but are liable to VAT at the standard rate (or the temporary reduced rate, see the Hospitality industry ― temporary reduced rate from 15 July 2020 to 12 January 2022 guidance note) when they are supplied due to the fact that they are supplied in the course of catering. Businesses using the point of sale scheme will be able to correctly account for VAT as the VAT liability will be determined at the time the goods are supplied. However, under the Direct Calculation and Apportionment schemes, the calculation is based on the VAT liability of the purchases made by the business. Therefore, these schemes cannot be used for catering businesses.

The catering adaptation should be used by businesses that cannot use the either normal accounting or the Point of Sale scheme and have a retail turnover of no more than £1m.


The following conditions must be satisfied.

The business

Popular documents