Flat Rate Scheme

The Flat Rate VAT Scheme is an alternative way to calculate how much VAT to pay to HMRC - based on the sales in the period alone.

If your turnover is under £150,000 you should be eligible to join the scheme, and then you pay a fixed percentage of your sales over to HMRC. The percentages vary depending on the sector that you fall in to but range from 4% to 14.5%. You can also claim back the VAT on any capital purchases exceeding £2,000 as well.

The introduction of a 16.5% rate for limited cost traders from 2017 does mean that if you have relatively few relevant costs then the actual savings through being in the Scheme are minimal.

If you think this or any other VAT scheme may be applicable to your business get in touch and we will be happy to guide you through making an informed decision.

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