VAT retail schemes
Apportionment Scheme
Who can use it
You can only use this scheme if you buy goods for resale.
You can’t use apportionment if you provide:
- services
- goods that you’ve made or grown yourself
- catering services
Your turnover, excluding VAT, can’t be more than £1 million a year.
There is a separate scheme for businesses with a turnover of between £1 and £130 million.
How to calculate your VAT
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Calculate the total value of goods purchased for resale in the VAT period for each VAT rate.
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Divide the total of purchases for each VAT rate by the total for all purchases.
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Multiply the outcome by your total sales, divided by 6 for 20% rated goods, and divided by 21 for 5% rated goods.
Example
In the VAT period you buy goods at the following VAT rates:
- £16,000 of goods at 20%
- £1,000 at 5%
- £10,000 at zero rate
Total purchases: £27,000
Your total sales are £34,000.
(£16,000 / £27,000) x £34,000 / 6 = £3,358.02
(£1,000 / £27,000) x £34,000 / 21 = £59.96
Total VAT for the period = £3,417.98