It is possible to opt for flat rate vat if you want to simplify your accounting

If your business is in a EU country that has adopted vat you’ll be able to choose flat rate vat if you want to simplify your accounting and also be far from presenting vat figures fully detail. This scheme allows 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 is normally required whenever you file vat returns.

For those who 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 fulfill the criteria put in place by the tax authorities in your country. In case your organization is located in Great Britain then you can opt for vat flat rate in case your estimated sales turnover within 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 vatnumbersearch touches £225,000.

Even though you will still have to display the vat amount in your vat invoice, you don’t need to keep an in depth account of the vat figures on the sale or purchase as you might need to do under normal vat circumstances. You will, however not be able to go in for vat reclaim just in case you opt for the flat rate vat scheme. UK also offers a 1% discount scheme for the first year for firms that opt for this scheme. In case you offer goods or services that fall under different vat rates then you will need to apply the highest vat rate if you do go for this scheme.

Thus, if you buy or sell goods or services under reduced vat rates or have to reclaim vat that has already been paid then this scheme wouldn’t be ideal for you. However, if you mostly deal in goods or services that involve standard vat rates, don’t need to go in for any vat refund, or engage in retail sale then your vat flat rate scheme will be perfect for you and your business. You could find added time to concentrate on growing your business instead of passing time on vat calculations while filing your returns would also become simpler.

These rules pertain to businesses opting for the scheme in the United Kingdom. You will have to review eu vat rules if your organization is located in another eu country. It is possible to join the flat rate vat scheme within your country by checking out the rules and filling out the necessary vat form. You will probably must find the classification of your goods and services so that you can make use of the appropriate flat vat rate while billing your customers. You can also leave the scheme to migrate to a different vat scheme by informing the relevant vat authorities before making your move.

Even though the system of vat is rather easy to implement, you will still require services of expert vat agent or consultant to help you with vat calculations, vat returns and vat refunds. However, in case your business format is fairly simple and you deal in limited goods or services that fall under standard vat rates then you can go for the flat rate vat scheme to simplify your accounting.