flat-rateDrummond Laurie Chartered AccountantsBeing vat registered can be a burden on a business.  However, HM Revenue & Customs (HMRC) have several schemes which may help to simplify this process.

The flat rate scheme was first introduced back in 2002.   This scheme means you pay vat at a fixed percentage of your vat inclusive turnover, instead of using the conventional method, where you would pay HMRC the difference between the vat you charge to your customers and the vat you can reclaim on your business expenses.

The actual percentage you use depends on the type of business you are.  HMRC have produced a list of business categories, each having a specified percentage. This scheme can be advantageous to businesses that generally have very little vatable expenditure.

Please note however, that you are required to register separately to join this scheme, and must have approval from HMRC.   You will be eligible to join the scheme if you expect your vat taxable turnover to be £150,000 or less (excluding vat), in the next 12 months.

the government website has more information on this www.gov.uk/vat-flat-rate-scheme or contact Gillian Wayne on Tel. 01324 441258 or email gillian.wayne@drummondlaurie.co.uk