This scheme is designed to reduce the cost of complying with VAT obligations by simplifying the way small businesses calculate their VAT. It is available to businesses who expect their taxable turnover in the next 12 months to be no more than £150,000.
Taxable turnover is calculated by looking at the total of supplies at the positive and zero rates, excluding VAT and the value of any capital assets expected to be sold.
The flat rate scheme saves time by removing the need to calculate and record output tax and input tax in calculating the net VAT due to HM Revenue & Customs (HMRC). The VAT in a period is calculated by applying the flat rate percentage to the tax inclusive business income for the period.
For more information please contact ataylor@streetsweb.co.uk or a member of our small business team.
