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Choosing Appropriate Vat Scheme

Choosing Appropriate Vat Retail Scheme

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Hi Everyone. The business is a retail business selling close to expiry date items. The purchases are a mix of standard and zero rated purchases. If vatable sales are calculated using the margin scheme , it doesnt take in to account the fact that not all the purchases have been sold. I was wondering if some one has dealt with a similar business and how they tackled this issue.

Thanks in advance

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11th Jan 2019 12:18

Identifying at the point of sale gives you the "right" answer.

Margin and apportionment schemes are approximations - but they can lead to less tax payable. Trying all the options and learning from your experience will solve the problem.

You should record any goods which are never sold - but that might prove very tedious. Only you can judge whether the work is worthwhile.

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to lionofludesch
11th Jan 2019 12:25

Unfortunately the business does not have a system that can identify Vat on the point of Sale.

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By Jdopus
to kamran37
11th Jan 2019 12:41

It needs to have one if it's registered for VAT. It doesn't necessarily need to be a software system, it can even be the business' owners identifying which sales are VATable manually. However, being able to properly record VAT on your sales when VAT registered is a basic legal requirement and you're setting yourself up for serious trouble in the future if you don't do this properly.

VAT is the most regularly inspected area of tax. Every VAT registered business will be inspected sooner or later.

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