VAT retail schemes
Direct Calculation Scheme
Who can use it
You might want to use this scheme if you make a small proportion of sales at one VAT rate and the majority at another rate.
Your turnover, excluding VAT, can바카라 사이트™t be more than £1 million a year.
There바카라 사이트™s a separate scheme for businesses with a turnover of between £1 million and £130 million.
How to calculate your VAT
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Calculate the expected selling prices (ESPs) for your minority or majority goods. Use the one that바카라 사이트™s easier.
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Total up the ESP for the VAT period.
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If your goods are standard rated at 20% divide the total ESP by 6. If they바카라 사이트™re zero rated, deduct the total ESP from your total sales. This will give you your sales at 20%. Then divide by 6.
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If you have reduced-rate (5%) goods deduct the ESP of this from your sales before calculating your VAT at 20%. Then calculate the VAT due on reduced-rate goods by dividing the ESP of these by 21. Add this figure to your 20% VAT to get total VAT due.
Example
Your total sales are £25,000.
Deduct the ESP of zero-rated goods = £2,500.
Deduct the ESP of reduced-rate (5% goods) = £105.
Sales of goods at the 20% VAT rate = £22,395.
Divide by 6 to calculate the VAT due on the 20% goods = £3,732.50.
Divide by 21 to calculate the VAT due on the 5% goods = £5.
Total VAT due is £3,732.50 + £5 = £3,737.50.
You must make an annual stock adjustment if your annual turnover is between £1 million and £130 million.