Flat Rate VAT Scheme
Paul from M P Accountants Northamptonshire discusses the VAT Flat Rate Scheme for Small Businesses.
If your VAT taxable turnover is below £150,000 net you could simplify calculating your VAT return by applying to jojn the flat rate VAT scheme. Under this scheme instead of having to calculate all your output VAT (VAT on sales) and deducting your input VAT (VAT on expenses) you ignore input VAT and calculate the VAT due by applying a certain percentage to your flat rate turnover.
Under the flat rate scheme generally you don’t reclaim any VAT back on expenses although you may be able to claim the VAT back on capital expenses in excess of £2,000.
The appropriate percentage to apply to your flat rate turnover depends on the business sector you are in. It will always be less than the standard rate of VAT and in some circumstances could result in lower VAT liabilities.
At M P Accountants Kettering, Corby, Northampton and Market Harborough are conveniently located near to our premises in Lamport although we have clients from all over the UK. We are a firm of Chartered Certified Accountants ensuring you receive a professional and competent service at all times.
If you need any advice regarding the flat rate VAT scheme or any other accounting or taxation matters please don’t hesitate to contact us.