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Officers should be aware of the possible benefits to a retailer of using particular ESP schemes.

• If the proportion of standard rate to zero rate purchases in a department or store is increasing, apportionment scheme 2 will produce a lower amount of output tax than a direct calculation scheme. This is because the calculation is based on the average proportion of such purchases over the last 12 months and so prolongs the historically lower standard-rated proportion.
• If the proportion of standard-rated purchases is falling, however, the reverse will be true. »Ê¹ÚÌåÓýapp direct calculation scheme is more responsive and will therefore reflect the change immediately. Under apportionment scheme 2, the falling standard-rated mix will be reflected incrementally during the course of the following year.

Retailers may wish to propose a mixture of methods to take advantage of such effects, and it is for this reason that certain mixtures of schemes are not allowed: see VRS3350.

Guidance on setting ESPs

• Notices How to work the apportionment schemes and How to work the direct calculation schemes give guidance on setting Bespoke retail schemes gives a checklist of the most common factors to be taken into consideration under ESP schemes.