Vat Service OMAN is made for firms with a turnover of less than £150,000 who want to simplify their VAT accounting.
The VAT Flat Rate Scheme functions as follows
You basically determine your VAT payments as a proportion of your complete, VAT-inclusive turnover. One particular downside to the VAT Flat Price Scheme, even so, is that you can not reclaim VAT on buys, as an regular is taken into account in calculating the flat rate proportion that you use.
You may possibly be in a position to assert back again the VAT on funds belongings value far more than £2,000 -make sure you inquire if you are doubtful.
The VAT Flat Price Scheme can lessen how considerably time you need to have to spend on accounting and doing work out your VAT.
Although you nonetheless need to display a VAT amount on each and every of your sales invoices, you do not require to report how a lot VAT you demand on each and every sale in your accounts, and the identical applies for the VAT you pay out on your purchases.
What is much more, if you are freshly VAT registered, you can decrease your flat charge by one% until the working day before the 1st anniversary of your VAT registration.
You Are unable to Be part of The VAT Flat Charge Scheme If…
You have been in the scheme, and still left in the preceding twelve months
You are, or have been within the preceding months, both eligible to sign up for an current VAT group, or registered for VAT as a division of a bigger enterprise
You use a single of the margin scheme for 2nd-hand merchandise, art, antiques and collectibles, the Tour Operators’ Margin Scheme, or the Funds Goods Plan
You have been convicted of a VAT offence or billed a penalty for VAT evasion in the last yr
Your business is closely associated with an additional business
You will not have to document the Price Included Tax you cost on each sale and buy
1st 12 months low cost if you might be freshly Price Added Tax registered
Much less guidelines to comply with
Much less chance of blunders
Certainty – you will often know what percentage of your using you will have to pay out to HMRC
You can’t reclaim VAT on buys
Potentially wouldn’t be the ideal choice for you if you presently make a lot of zero-rated or exempt sales
Potentially wouldn’t be the ideal option for you if you regularly acquire a VAT reimbursement beneath normal VAT accounting
And there you have it the pro’s and con’s of the VAT Flat Fee Plan!