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HMRC internal manual

VAT Retail schemes guidance

From
HM Revenue & Customs
Updated
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Point of sale (POS) schemes: Migrating to EPOS for VAT accounting

If a retailer already has EPOS, but is not currently using it for VAT accounting, an initial approach could be to find out:

  • what does he use it for?
  • what business decisions are made on the basis of its outputs?
  • is it capable (if only in theory) of identifying sales at each VAT rate either at point of sale or after the event?
  • what (if any) sales do NOT go through EPOS?
  • what (if any) sales go through EPOS on generic codes (dump codes)?
  • does it take all DGT components into account?

Your usual contacts at the business may not have this information: you may need to interview IT staff, buyers, stock controllers, store managers, or their staff, to obtain the required information.

In order for the EPOS system to be used for VAT accounting, the system will need to identify the VAT liability of the product. This must be incorporated in a product file that the till is capable of accessing. Not all first-generation EPOS systems have the ability to look up product liability. Where this is available, accounting for output tax through the system may be as simple as flipping a switch but, if not, more extensive changes may be required such as:

  1. by adding on off-the-shelf widget boxes; or
  2. by major rewrites of the software.

In some cases such a change may be impossible within the existing system.

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