When running a business, ensuring you get VAT right is vital. So, how can you make things easier?
Designed to streamline record-keeping, the VAT Flat Rate Scheme allows you to pay or claim back a simplified fixed rate of VAT to HMRC.
This typically allows you to keep the difference between the VAT you charge to customers and the VAT you pay on your own purchases.
What are the benefits of the scheme?
Maintaining detailed records of sales and purchases can be tedious and time-consuming for any business, and the scheme aims to simplify this.
Additionally, it offers fixed rate percentages that are lower than the standard rate, supporting cash flow management.
Are you eligible?
If you wish to use the scheme, you must meet the criteria. This includes:
However, there are some instances where your company will not benefit from the scheme.
For example, if your customers are VAT registered, you must determine the VAT and issue VAT invoices in the usual way.
Other reasons the scheme will not be right for you include:
What happens next?
If your application is successful, HMRC will confirm this in writing.
The letter will state when you can begin to use the scheme, which will typically be from the start of the VAT period once your application is received.
You may request an earlier or later start date. When doing so, HMRC will take multiple factors into account, including when you apply and your compliance record.
It is advisable to speak to an accountant before joining the scheme to be sure it is right for your business. Please contact our team today.
“Richard Anthony case study – Terry Lewis – Jaques Samuel Pianos Widely considered to be London’s leading piano retailer, Jaques Samuel Pianos has grown considerably from its humble beginnings in the front room of Mr Samuel’s home in Notting Hill. They are now internationally recognised and have provided pianos for high-profile clients like Queen and […]”
Terry Lewis – Jaques Samuel Pianos
“Richard Anthony: ‘a super-star firm’ MT Finance is a property finance lender, specialising in bridging loans and auction finance. They assist numerous property professionals, business owners, and individuals with their finance requirements and specialise in short-term asset-based lending. Founder and Director, Tomer Aboody, knew that as an asset-based lender, the business would require an expert […]”
Tomer Aboody – MT Finance
“A family fairground success story The Botton family have been running a traditional fairground, arcade and amusement park in the heart of Skegness since taking over the Pleasure Beach in 1965. Jim, the Director of the company, took over from his father and now heads day-to-day activities and administration. He said: “The Pleasure Beach is […]”
Jim Botton – Pleasure Beach (Skegness)