If you run a small business, did you know you might be better off under the flat rate VAT registration scheme? It can reduce your VAT burden dramatically with rates of by anywhere between 4% and 14.5% compared to the painful standard 20%.
What is the flat VAT rate scheme?
If your small business sells less than £150,000 worth of stuff per year you’re probably eligible for the scheme, which is designed to simplify VAT returns to save small business owners time and hassle. It works by applying a set percentage rate to work out your VAT instead of taking all your input and output into account.
Do I still invoice inc VAT?
Yes, you still need to include VAT on invoices but you don’t need to record it on all your sales and purchases in your actual accounts, which will be a serious relief! It’s simply calculated as a flat rate percentage of sales including the VAT you’ve added.
Flat rate VAT financial benefits
If your business doesn’t buy much stuff you can claim VAT back on, a flat rate can even mean the VAT you return is less than you invoiced. Which is even better news!
Lost in space?
If you’re confused, you’re not alone. A training course will do the trick, transforming you into a VAT-confident small business owner in no time. Contact me for details.