VAT retail schemes
2. Point of Sale Scheme
Who can use it
You can use this scheme if you can identify the VAT rate for goods sold at the time of sale, eg you have an electronic till that does this for you.
How to calculate your VAT
Add up all the sales for each VAT rate for the VAT return period.
For 20% rated goods, divide the sales by 6. For 5% rated goods, divide the sales by 21.
You’ve sold £24,000 worth of 20% rated goods and £105 worth of 5% rated goods.
£24,000 / 6 = £4,000
£105 / 21 = £5
You need to record a total of £4,005 for the VAT return period.