Fowles Spurling Cannon - can we save you money, or help you generate extra income?

SEARCH, INDEX, UPDATES, CONTENTS, SERVICES, VAT RETURNS, RETAIL SCHEMES

See also VAT Planning, VAT Flat Rate Scheme, VAT Returns, VAT Bad Debt Relief, VAT Capital Goods Scheme, VAT Car Fuel Scale Charge, VAT Cars including Leased Cars, VAT Partial Exemption, VAT Registration Numbers

The "normal" method of calculating output VAT is the record the sales invoices of a business and total them for each VAT Return period.

H.M. Customs & Excise accept that someone who only has retail supplies, generally of a low value, made to a large number of customers in small quantities, cannot reasonably be expected to account for VAT in the "normal" way.

From 1 April 1998 there are four main methods for retailers to calculate their output VAT -

• point of sale - the VAT rate of every sale is recorded at the point of sale.
• apportionment - sales are apportioned based on purchases.
• direct calculation - a mark up is applied to one category of goods.
• bespoke - turnover exceeding £10m. per annum - not explained here.

There are various methods of recording output VAT at point of sale.  A paper record of each sale may be appropriate, or a multi button till, or an Electronic Point Of Sale (EPOS) till.

The apportionment schemes 1 and 2 assume that the division of sales between standard and zero rated goods will be in the same ratio as the purchase of those goods.  This ignores the possibility that some goods carry a higher mark up than others.

The direct calculation schemes 1 and 2 apply a calculated mark up to the category of goods which are in the minority.  The mark up has to be done in a fair and reasonable manner.

Reminder - disclaimer applies. Please feedback your comments.  This page was last modified 29 June 2002.