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Vat Scheme for Tea Room

What is the best Vat scheme for cafe with mostly 20% sales output, but minimal vat input

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I have a client that has many receipts for food purchases from Tesco, Waitrose etc etc with very little input Vat.  I have been struggling by trying to split these bills with the odd item that has Vat on them. 

The majority of their sales are 20% Vat rated, although there is a-some zero rated (takeways etc).

They are two large to apply for Flat Rate Vat.

I'm not sure the apportionment scheme would apply, as the purchases are not for resale - they are ingredients in the meals, and I don't think the direct calculation method would help at all.

I want to reduce the book-keeping time as it takes so long.

Any ideas anyone?

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chips_at_mattersey
By Les Howard
23rd Jan 2020 13:26

I would consider the Catering Adaptation (Notice 727, chapter 80. Essentially you do a sample exercise to determine the split of standard and zero rated sales. Do a new sample exercise each VAT Return period.
Based on your comments, I would base the sample exercise on the value of zero rated sales in a typical day.

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Replying to leshoward:
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By AJBetts77
23rd Jan 2020 14:49

Thanks Les. This doesn't really help though. It's the input vat that's the problem. The output is simple, as we are using the retail point of sale scheme (which you have to prove why you can't use that to use the catering adaption).

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Replying to AJBetts77:
RLI
By lionofludesch
23rd Jan 2020 14:53

AJBetts77 wrote:

Thanks Les. This doesn't really help though. It's the input vat that's the problem. The output is simple, as we are using the retail point of sale scheme (which you have to prove why you can't use that to use the catering adaption).

It's just how it is. Your other option would be to buy from wholesale outlets.

Tesco mark standard rated products with an asterisk, if I remember correctly. Morrisions have a summary at the bottom of the bill. Just do your best and bear in mind that there's a balance between your time and the VAT recovered.

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By WhichTyler
23rd Jan 2020 13:28

How much VAT are they recovering on these receipts in a typical month? is it more or less than the cost of the time it take you to separate them out? If less or similar, then is recovering that VAT actually worth it?

Alternatively if they do all the purchases on a business card, you may be able to get a VAT summary from the card statement. Some suppliers are set up to provide them, don't know if Tesco or Waitrose are among them...

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Replying to WhichTyler:
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By AJBetts77
23rd Jan 2020 15:02

How do you get these?

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Replying to AJBetts77:
RLI
By lionofludesch
23rd Jan 2020 15:22

AJBetts77 wrote:

How do you get these?

With difficulty. Ask and argue.

Why not use stores which provide them on the till receipt ? Lidl and Aldi do this.

Looking at other bills, Asda don't do a summary but mark each line D (zero) and V (taxable). Tesco mark taxable items * as do Sainsbury's. Morrisons seem to have stopped with their summaries.

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By Malcolm McFarlin
23rd Jan 2020 17:45

I believe Tesco customer services section will provide a proper VAT invoice. They may be able to assist -if your client is buying items in large quantities.

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RLI
By lionofludesch
25th Jan 2020 10:11

Is the problem that these purchases are relatively small and numerous ?

Fresh stuff every day ?

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