If you are searching for a Flat rate VAT scheme for your business, then make sure that your business taxable turnover is less than £150,000. The major advantage of this scheme is that it saves your time for calculating taxes and managing accounts.
Basically, paid VAT to HMRC is the VAT you charge minus VAT you pay. When you use the FLAT RATE SCHEME, you pay a fixed amount of VAT tax calculated by a specific percentage. This percentage varies from business to business and it smoothens the flow of cash and also saves time.
Related: Check Ireland Vat 2022
With the VAT scheme, you get rid of saving records on each sale and purchase. This saves a lot of your time and allows you to spend this time on the development of your business. But you need to verify the invoices as you do in the normal business account.
In the first year of the registration, you get a 1% discount on the flat scheme. You have no need to separately work on the VAT purchases and claiming. There are also fewer chances of mistakes on it with full knowledge of payments to HMRC.
When the percentage is calculated then it involves zero-rated account and exempt sales. It also involves the allowance on the VAT that you spend on the sales. There may be 3 reasons under which the Flat scheme will not be feasible for your business.
These are as follow:
Please talk with the accountant of HMRC, if you need any support.