If your VAT registered it may well suit your business to be on a Flat Rate Scheme. It may save you money although it’s not designed with this in mind. This tends to depend on what sector you are in, and how much VAT you pay out on your costs, it does however make calculating your VAT liability a lot easier.
CAN ANYONE VAT REGISTERED JOIN A VAT FLAT RATE SCHEME?
The simple answer to this is no, you must apply To HMRC and meet certain criteria to be accepted onto the scheme. The main rule to qualify is that everything you plan to sell that is subject to VAT for your business is under a turnover limit of £150,000 excluding VAT. Then if your business goes over £230,000 you can no longer use the scheme. Also, HMRC won’t let you join the scheme if you’ve been guilty of a VAT offence or charged a penalty for evading VAT within the last 12 months of your application.
HMRC have set rate percentages for each different sector and industry of business for Flat Rate Schemes. Therefore should you be interested in joining a VAT scheme it would be best discussed with a Liverpool based accountant to calculate your latest figures to establish if it would be beneficial for you.
Keli Evans, Director at LJS Accounting Services, excels in taxation and statutory accounts. With a focus on strong client relationships, she leads a diverse portfolio, overseeing vital financial aspects like VAT, payroll, pensions, and taxation with a holistic and committed approach.