If your business is in an EU country that has adopted vat you’ll be able to opt for flat rate vat if you want to simplify your accounting and stay away from presenting vat figures in full detail. This scheme allows you to simply calculate a prescribed percentage of your vat inclusive sales as being the final vat figure without going into intricate sale or purchase details, as is normally required whenever you file vat returns.
For those who have a fundamental problem of being aware what is vat and foresee problems to maintain detailed vat accounts then you can choose the vat flat rate scheme provided you meetthe factors http://vatverification.com set up by the tax authorities in your country. If your business is located in Great Britain then you can opt for vat flat rate if your estimated sales turnover in the next year excluding vat is not over £150,000 or including vat is not 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 in your vat invoice, you need not keep an in depth account of the vat figures on your sale or purchase as you might need to do under normal vat circumstances. You will, 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. If you happen to deal in services or goods that fall under different vat rates then you’ll have to apply the highest vat rate should you choose opt for this scheme.
Thus, if you buy or sell services or goods under reduced vat rates or need to reclaim vat that has recently been paid this scheme wouldn’t be suitable for you. However, should you mostly deal in services or goods that entail standard vat rates, don’t need to have any vat refund, or engage in retail sale then your vat flat rate scheme will be ideal for both you and your business. You could find more time to concentrate on growing your business rather than passing time on vat calculations while filing your returns would also become simpler.
These rules apply to businesses choosing the scheme in the United Kingdom. You will have to review eu vat rules in case your business is located in another eu country. You can join the flat rate vat scheme in your country by studying the rules and completing the required vat form. You will also must find out the classification of your services and goods so that you can make use of the appropriate flat vat rate while billing your customers. You may also leave the scheme to migrate to another vat scheme by informing the appropriate vat authorities before making your move.
Although the system of vat is fairly easy to implement, you will still require services of an expert vat agent or consultant to assist you with vat calculations, vat returns and vat refunds. However, in case your business format is fairly 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.