In case your business is in an EU country which has adopted vat you’ll be able to choose flat rate vat if you wish to simplify your accounting and also be away from presenting vat figures fully detail. This scheme enables you to simply calculate a prescribed amount of your vat inclusive sales as the final vat figure without going into intricate sale or purchase details, as it is normally required whenever you file vat returns.
For those who have a basic problem of understanding what is vat and foresee problems to maintain detailed vat accounts then you can opt for the vat flat rate scheme provided you fulfill the criteria set up by the tax authorities in your country. If your business is situated in Great Britain then you can opt for vatcontrol.com vat flat rate if your estimated sales turnover within the next year excluding vat is not over £150,000 or including vat isn’t over £187,500. It is possible to remain under this scheme until your turnover touches £225,000.
Although you will still need to display the vat amount as part of your vat invoice, you need not keep a detailed account of your vat figures on the sale or purchase when you would have to do under normal vat circumstances. You’ll, however be unable to go for vat reclaim just in case you choose the flat rate vat scheme. UK offers a 1% discount scheme for the 1st year for businesses that choose this scheme. In case you deal in goods or services that fall under different vat rates then you’ll have to apply the highest vat rate if you do opt for this scheme.
Thus, if you purchase or sell goods or services under reduced vat rates or need to reclaim vat that has recently been paid then this scheme would not be ideal for you. However, should you mostly offer services or goods that entail standard vat rates, do not need to have any vat refund, or engage in retail sale then your vat flat rate scheme will be ideal for you and your business. You could find more time to concentrate on growing your business rather than spending time on vat calculations while filing your returns would also become simpler.
These rules pertain to businesses opting for the scheme in the UK. You will have to check on eu vat rules in case your business is located in another eu country. You can join the flat rate vat scheme within your country by studying the rules and filling out the necessary vat form. You will also must find the classification of your goods and services to be able to make use of the appropriate flat vat rate while billing your clients. You can also leave the scheme to migrate to another vat scheme by informing the appropriate vat authorities prior to making your move.
Although the system of vat is fairly easy to implement, you’ll still require services of an expert vat agent or consultant to help you with vat calculations, vat returns and vat refunds. However, in case your business format is kind of basic and you offer limited services or goods that come under standard vat rates you’ll be able to go for the flat rate vat scheme to simplify your accounting.