It is possible to opt for flat rate vat in order to simplify your accounting

If 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 also be away from presenting vat figures in full 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 is normally required when you file vat returns.

If you have a basic 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 meetthe factors vatverification set up by the tax authorities inside your country. In case your business is located 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 a detailed account of your vat figures on your sale or purchase as you would have to do under normal vat circumstances. You’ll, however be unable to go for vat reclaim in case you choose the flat rate vat scheme. UK offers a 1% discount scheme for the first year for businesses that choose this scheme. If you happen to deal in services or goods 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 services or goods under reduced vat rates or need to reclaim vat that has already been paid this scheme wouldn’t be ideal for you. However, should you mostly deal in services or goods that entail standard vat rates, do not need to have any vat refund, or take part in retail sale then your vat flat rate scheme will be ideal for you and your business. You can get added time to focus on growing your organization 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 UK. You will need to check on eu vat rules if your organization is located in another eu country. It is possible to join the flat rate vat scheme in your country by studying the rules and completing the necessary vat form. You will probably must find out the classification of the 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 another vat scheme by informing the relevant vat authorities before making your move.

Even though the system of vat is fairly simple to apply, you’ll still require the 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 goods or services that fall under standard vat rates you’ll be able to go in for the flat rate vat scheme to simplify your accounting.