The UK attempted to comply with the then sixth VAT directive by amending its legislation in 1977, but there are derogations from the directive.

The derogations that were communicated to the Commission on 27 December 1977 include:

(1)special VAT schemes for retailers – retailers do not have to record full details of and calculate tax on each transaction (Notice 727);

(2)exemption from registration – where a person who exceeds the registration limit satisfies HMRC that all his taxable supplies would be zero-rated if he were a taxable person, e.g. small food retailers who prefer to bear VAT on their ‘inputs’ rather than have to register;

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