Buyers must still accurately calculate the VAT they can reclaim from HM Revenue & Customs (HMRC).

Suppliers must still accurately calculate the VAT they must pay to HMRC (unless they are using a retail VAT accounting scheme).

Calculate the VAT that would have been paid under the flat rate scheme if your customer had paid you.

In this case, in order to claim back the VAT on your purchase, you'll need to calculate the VAT from the VAT-inclusive amount.

Using the Flat Rate Scheme you do not have to calculate the VAT on each and every transaction.

The Tour Operators' Margin Scheme solves this problem by allowing tour operators to calculate the VAT on just the value that they add.

HMRC will calculate the VAT that you owe based on the amount outstanding at the date on which the business became insolvent.

Add up the standard-rated expenditure identified in steps 2 and 3 and calculate the VAT on it - that is multiply by 17.5%.

For example, if your customers are VAT registered you will have to calculate the VAT and issue VAT invoices in the normal way.

Calculate the VAT due on your sales, by applying the appropriate VAT fraction to your retail sales figures.