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HMRC internal manual

VAT Retail schemes guidance

HM Revenue & Customs
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Introduction: Background

Businesses normally account for VAT by reference to the invoices they issue and the VAT amounts due on the individual supplies they make. This is often impractical for retailers who may have a very large number of transactions in any one day. Retail schemes remove the need for the retailer to identify the VAT liability of every transaction by providing an alternative method of calculating output tax liability.

Retail schemes are generally available to any retailer who wishes to use them but their use is limited to businesses that cannot reasonably be expected to account for tax in the normal way - see VRS2200