In case your company is in an EU country that has adopted vat you’ll be able to choose flat rate vat if you want to simplify your accounting and stay away from presenting vat figures fully detail. This scheme allows you to simply calculate a prescribed amount of your vat inclusive sales as being the final vat figure without going into intricate sale or purchase details, as it is normally required whenever you file vat returns.
If you have a fundamental problem of being aware what is vat and foresee problems in maintaining detailed vat accounts then you can certainly opt for the vat flat rate scheme provided you fulfillthe factors put in place by the tax authorities inside your country. In case your organization is situated in Great Britain then you can certainly opt for vat flat rate if your estimated sales turnover within the next year excluding vat isn’t over £150,000 or including vat is not over £187,500. You can remain under this scheme until your turnover http://vatnumbersearch.com touches £225,000.
Even though 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 your sale or purchase as you might need to do under normal vat circumstances. You’ll, however not be able to go for vat reclaim just in case you choose the flat rate vat scheme. UK also offers a 1% discount scheme for the first year for firms that choose this scheme. If you happen to offer services or goods that come under different vat rates then you will have to apply the top vat rate if you do go for this scheme.
Thus, if you purchase or sell goods or services under reduced vat rates or have to reclaim vat that has recently been paid this scheme would not be suitable for you. However, should you mostly deal in goods or services that entail standard vat rates, don’t need to go in for any vat refund, or take part in retail sale then your vat flat rate scheme would be ideal for you and your business. You could find more time to concentrate on growing your business instead of passing time on vat calculations while filing your returns would also become simpler.
These rules apply to businesses opting for the scheme in the United Kingdom. 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 in your country by studying the rules and filling out the necessary vat form. You will probably must find the classification of your services and goods so that you can use the appropriate flat vat rate while billing your customers. You can 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 the services of expert vat agent or consultant to help you with vat calculations, vat returns and vat refunds. However, if your business format is fairly simple and you deal in 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.