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Retail schemes ― direct calculation


Produced by a Tolley Value Added Tax expert
Value Added Tax
Guidance

Retail schemes ― direct calculation


Produced by a Tolley Value Added Tax expert
Value Added Tax
Guidance
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This guidance note provides an overview of the two Direct Calculation retail schemes and should be read in conjunction with the Retail schemes ― overview and Retail schemes ― specific industries guidance notes.

Overview

The following thresholds apply to businesses wishing to use a Direct Calculation scheme:

SchemeTurnover limit
Direct Calculation scheme 1Total retail turnover must not exceed £1m
Direct Calculation scheme 2Total retail turnover between £1m - £130m

Businesses with a total retail turnover exceeding £130m per annum will need to agree a bespoke retail scheme with HMRC. See the Bespoke retail schemes guidance note for more information.

It is important to note that these thresholds apply to the whole turnover and not just to the value of the retail sales made by the business.

Businesses using the schemes need to calculate the Expected Selling Price (ESP) of the retail goods sold at one or two VAT rates in order to identify the proportion of the Daily Gross Takings (DGT) that relates to

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  • 24 Mar 2025 10:30

Home/ ½Û×ÓÊÓƵ Guidance/ Value Added Tax / Choosing and operating a special VAT scheme

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