In case your business is in a 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 far from presenting vat figures in full detail vatcheck.com. This scheme enables you to simply calculate a prescribed percentage 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 fundamental problem of being aware what is vat and foresee problems to maintain detailed vat accounts then you can certainly opt for the vat flat rate scheme provided you meetthe factors set up by the tax authorities in your country. If your business is situated in Great Britain then you can certainly go for 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 have to display the vat amount in your vat invoice, you need not keep an in depth account of your vat figures on your sale or purchase as you would have to do under normal vat circumstances. You’ll, however not be able to go for vat reclaim just in case you opt for the flat rate vat scheme. UK offers a 1% discount scheme for the 1st year for businesses that opt for this scheme. If you happen to offer services or goods that fall under different vat rates then you will have to apply the highest vat rate if you do go 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 wouldn’t be ideal for you. However, should you mostly deal in services or goods that involve standard vat rates, do not need to go in for any vat refund, or take part in retail sale then the 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 choosing the scheme in the United Kingdom. You will have to check on eu vat rules if your business is situated in another eu country. You can join the flat rate vat scheme in your country by checking out the rules and filling out the required 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 may also leave the scheme to migrate to a different vat scheme by informing the relevant vat authorities prior to making your move.
Even though the system of vat is fairly simple to apply, you will still require services of an expert vat agent or consultant to assist you with vat calculations, vat returns and vat refunds. However, if your business format is fairly simple and you offer limited services or goods that fall under standard vat rates you’ll be able to go for the flat rate vat scheme to simplify your accounting.