Adaptations to standard retail schemes: Direct calculation scheme
Direct calculation scheme 1
See VRS5250 for the turnover limit.
Direct calculation scheme 2
The business is required, at the start of the scheme year, to know the ESPs for the minority goods in stock. This figure is used at the year-end, together with the ESPs of the closing stock of such goods, in the annual adjustment. If a physical stock-take is impossible or impractical, you may consider alternative methods of arriving at the necessary stock figure provided that you are satisfied that the methods proposed will provide a reasonably accurate valuation at ESP of the minority goods stock. VRS5250 contains some possible alternatives.
In any event, the method to be used for valuing opening and closing stock must be consistent.
Both direct calculation schemes: using ESPs for non-minority groups
Retailers with a turnover of below £1 million may operate the scheme using ESPs for goods which do not form the minority sales where it is not only simpler for the retailer, but also easier for us to audit. Such a situation may arise in the case of a newsagent whose major proportion of sales is newspapers and magazines.