AtchleyLowery508

2012-08-23T01:15:23Z

AtchleyLowery508: Created page with 'The Flat Rate Scheme was introduced as an simple way for small businesses to calculate their VAT liability. The Flat Rate VAT scheme is obtainable to organizations with a taxabl…'

The Flat Rate Scheme was introduced as an simple way for small businesses to calculate their VAT liability.

The Flat Rate VAT scheme is obtainable to organizations with a taxable turnover below 150,000 excluding VAT (also exempt and non-taxable sales should be beneath 37,500).

Under the flat rate scheme, you merely hold a percentage of the VAT charged to your buyers. The percentage you maintain varies depending upon which industry you are in.

You ignore VAT on your purchases, the VAT you spend simply becomes a cost. Eg If you devote 10 + VAT on stationery, the expense of that stationery becomes 11.75.

The flat rate scheme does allow you to reclaim the VAT on 'large' capital items - where you devote more than 2,000 you can reclaim the VAT on that item.

Really should I be on the flat rate scheme?

As you claim a percentage of sales, these with higher sales stand to advantage more.

Those with low purchases (therefore paying tiny in reclaimable input tax) also stand to acquire from the scheme.

For instance A organization with sales of 149,000 (excluding VAT) and in the category of "any other activity not listed elsewhere" - ten% flat rate and with negligible input VAT say 500 will save 8,068 per annum by switching to the Flat Rate VAT scheme.

To see how considerably you may save, try the Flat Rate VAT scheme calculator

How do I join the Flat Rate VAT Scheme?

The easiest way is to call the VAT advice line on 0845 010 9000, who will be in a position to take your VAT registration quantity and pertinent specifics on the telephone, following which you will be registered right after around 21 days.

Alternatively, you can download the scheme application form from HMRC .

How do I determine which sector my organization falls into?

If your business has sales in two or more sectors, you really should apply the percentage appropriate to the principal company activity, as measured by your sales.

Some sectors are clearer than others. The difference in between "other business services" and "solutions not elsewhere specified" is far from clear. If you telephone HM Revenue & Customs for guidance, make certain you hold a note of the name of the person you speak to and the date of the call. [http://www.ppiclaimsletter.com/ ppi claims letter] [http://www.ppiclaimuk.co.uk/ ppi claims] [http://www.ppiclaimsletter.com/ ppi claims letter]

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