You could simplify your accounting by using the Flat Rate Scheme for VAT

Turnover less that £150k? You could simplify your accounting by using the Flat Rate Scheme for VAT.

The amount of VAT a business pays or claims back from HM Revenue and Customs (HMRC) is usually the difference between the VAT charged by the business to customers and the VAT the business pays on their own purchases.

With the Flat Rate Scheme:

you pay a fixed rate of VAT to HMRC
you keep the difference between what you charge your customers and pay to HMRC
you can’t reclaim the VAT on your purchases - except for certain capital assets over £2,000

To join the scheme your VAT turnover must be £150,000 or less (excluding VAT), and you must apply to HMRC.

You must be eligible to join the scheme.

How to join

You can join the scheme:

online - when you register for VAT
by post - fill in VAT600 FRS and send it to the address on the form (or useVAT600 AA/FRS to apply for the Annual Accounting Scheme at the same time)

You’ll get confirmation you’ve joined the scheme through your VAT online account (or in the post if you don’t apply online).

For eligibility, check out: https://www.gov.uk/vat-flat-rate-scheme/how-much-you-pay

Replies

Andy@Countrywide Landscaping February 16, 2016 at 10:27am

One of the best decisions we made when we first applied to become VAT registered. My understanding of it is that the rate increases by 1% per year up to the max of whatever the current rate may be at that time.
- Ben Jakes > Andy@Countrywide Landscaping December 6, 2016 at 6:09pm
  
  So you end up paying full VAT but unable to reclaim anything?
  - PRO
    
    Steven Mills > Ben Jakes December 6, 2016 at 8:19pm
    
    Hi Ben - If my understanding is correct then under the category "other activities" you'd pay 12% VAT.
PRO

Steven Mills December 6, 2016 at 3:19pm

Can anyone confirm if grounds maintenance comes under the scheme? .

Thanks
- PRO
  
  Steven Mills > Steven Mills December 6, 2016 at 3:32pm
  
  To answer my own question,it appears it does but would most likely fall under the category "activity not listed elsewhere" ?
  - briggsandscrapem > Steven Mills December 6, 2016 at 6:28pm
    
    We were on it a few years ago so you shouldn't have a problem. Another point to take note of is for single item purchases over £2000 (net of vat) you get to claim the vat back. That was the case at that time anyway.