The Flat Rate VAT Scheme
Establishing which VAT scheme works best for each of our clients is an integral part of our work.
If, excluding VAT, your business has a turnover of less than £150,000 per year, you have the option to choose the Flat Rate Scheme.
It’s very simple: You pay VAT as a specific percentage of your total sales. You even get an additional 1% reduction if you are in the first year of VAT registration.
Let’s say you are in the photography business for example: The VAT payable is 11% of your gross sales (but only 10% in your first year of VAT registration).
You only have to pay HMRC a percentage of your turnover but you still have to charge your customers at the appropriate normal rate.
Once you join the scheme you can stay in it as long as you want until your total turnover is more than £230,000.
You can leave the scheme at any time by telling HMRC. However, once you have left the Flat Rate VAT Scheme, you can’t rejoin for at least 12 months.