Retail Scheme

The schemes normally apply to retailers of goods only. If you make both retail and non-retail sales, you will be able to use a retail scheme for your retail sales only. If you make any other supplies, for example to other VAT registered businesses, you must account for them outside the scheme. Any supplies which you deal with outside a scheme must be dealt with in the normal way, i.e. by issuing tax invoices. You must therefore follow the rules in the General Guide -Public Notice No 3 (PN3) on the download section for that part of your output tax. For example, the tax charged on most supplies of hotel accommodation and restaurant meals will be accounted for by the issue of tax invoices in the normal way. However, if you supply catering services and also have a retail outlet, such as a retail shop, which makes non-catering supplies, you may use a Retail Scheme for that part of the business provided you can keep completely separate records for both activities.

This scheme is for calculating VAT when all of your supplies are at the flat rate only. If all your supplies are flat – rated, this is the only scheme you can use.

This scheme is for use when the supplies you make are of mixed liability (i.e. both taxable and exempt supplies). Under this scheme you have to separate your takings at the point of sale, for example, by using separate or multi-total tills. Provided you can do this accurately, the scheme is very simple to operate.

The third scheme can be used as an alternative to Scheme 2 where a person cannot differentiate at the point of sale between the different types of goods sold (taxable or exempt supplies). This scheme bases the proportion of taxable goods sold on the proportion that the taxable goods form out of the total value of all goods purchased for resale in the same state. This assumes that if goods for resale are purchased in a certain proportion then they are sold in the same proportion.