Google Docs Link https://docs.google.com/spreadsheets/d/1NyVN2XW3hjpcAYFdjGPCrbeMa-HyfOcgy3eKnNj2wi0/edit#gid=68376799
Usually, how much VAT a business pays or claims back from HM Revenue and Customs (HMRC) is the difference between the VAT they charge customers and pay on their purchases.
With the Flat Rate Scheme:
- you pay a fixed rate of VAT over to HMRC
- you keep the difference between what you charge your customers and pay over to HMRC
- you can’t reclaim the VAT on your purchases – except for certain capital assets over £2,000
To join the scheme your VAT turnover must be less than £150,000 (excluding VAT) and you must apply to HMRC.
You can join the scheme:
- online – when you register for VAT
- by post – fill in VAT600 FRS and send it to the address on the form (or use VAT600 AA/FRS to apply for the Annual Accounting Scheme at the same time)
Confirmation you’ve joined the scheme is sent to your VAT online account (or in the post if you don’t apply online).
In your first year as a VAT-registered business the rate is reduced by 1% until the day before your registration anniversary.
The Flat Rate Scheme has its own Cash Basis and Retail Systems. (VAT Notice 733)
Try our calculator to see if you could save money!
steve@bicknells.net
