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HMRC internal manual

VAT Retail schemes guidance

HM Revenue & Customs
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Bespoke schemes: practical guidance: Withdrawing part of an agreement

The powers to withdraw a scheme, couched in regulation 68 of the VAT Regulations 1995, apply to the whole of the scheme.

If there is disagreement about part of the scheme, the options are:

  • to agree with the business that the scheme will be amended to exclude the disputed element; or
  • to explicitly withdraw the entire scheme, using the regulation 68 powers, whilst simultaneously offering the business the option of continuing to use the agreed scheme minus the offending element.

In both cases, any communication should make it clear that HMRC will require (or allow) the disputed element to be reintegrated from the date of exclusion or withdrawal, once agreement has been reached.