Flat Rate VAT – Can you benefit?

31st March 2015

We have recently worked with a few of our clients to help make VAT registration work for them.

As a small business VAT registration whether compulsory or voluntary can be a daunting task but what if you could vastly reduce the work involved and even profit from registering?

If your turnover is less than £150,000 then you can use the flat rate scheme. Under the scheme you still charge VAT to your customers in the normal way but instead of knocking off VAT on your purchases a percentage of your VAT inclusive turnover is paid to HMRC. The flat rate percentage varies by trade but for example using a 10% flat rate, on £1,000 of sales, VAT of £200 would be charged and only £120 would be payable to HMRC, therefore retaining £80.

If you are below the VAT registration threshold but most of your sales/services are to other VAT registered businesses then you could benefit the most.

Please contact us to discuss this further if it is of interest.

Book your free initial Bennetts Accountancy consultation