Advent Day 3 – Flat Rate Vat Scheme

𝗗𝗮𝘆 𝟯 – 𝗙𝗹𝗮𝘁 𝗥𝗮𝘁𝗲 𝗩𝗮𝘁 𝗦𝗰𝗵𝗲𝗺𝗲

Let’s take a moment to explain the Flat Rate VAT Scheme.

This scheme is designed to simplify record keeping for businesses, particularly small and medium-sized entities.

Under the Flat Rate scheme, you pay VAT as a fixed percentage of your 𝗩𝗔𝗧 𝗶𝗻𝗰𝗹𝘂𝘀𝗶𝘃𝗲 turnover.

The actual percentage you use depends on your type of business. The great advantage of this scheme is that you don’t have to record the VAT that you incur on each purchase, as you would with standard VAT accounting in favour of the reduce rate of VAT

For instance, if your business has a flat rate of 12% and you had a VAT inclusive turnover of £10,000 for a quarter, the VAT to pay HMRC would be £1,200.

This scheme can help you save time and manage your cash flow better.

Remember, not all businesses are eligible to use the Flat Rate Scheme. Your VAT turnover must be £150,000 or less (excluding VAT), among other conditions.

Before making a decision, it’s crucial to look at the specifics of your business and whether this scheme will be beneficial for you.

At Digivolve Accountants, we are here to guide you through this process.

Don’t hesitate to reach out if you have any questions or need more explanation. We’re here to help!

#VAT #FlatRateScheme #AccountingTips #DigivolveAccountants