Readers forum_Apportionment scheme

Apportionment scheme

I have taken on a new client who trades as a confectionery tobacco and newsagent business. He has three different stores under the same legal entity of a sole trader. The business is VAT registered and has always used apportionment scheme 1 to calculate the output tax payable in each period. However the client’s total annual turnover is £1.2m excluding VAT and has exceeded £1m for the past eight years. This would seem to suggest that he should not be using this scheme. My initial thought is that it seems unfair that HMRC does not appear to increase the scheme thresholds for inflation.

Is it relevant that no single store exceeds an annual turnover of £1m?

I have agreed with the client that for future returns he will use a point of sale scheme to calculate his output tax. But do...