If your company is in an EU country which has adopted vat you’ll be able to choose flat rate vat if you wish to simplify your accounting and also be away from presenting vat figures fully detail vatcheck.com. 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 it is normally required when you file vat returns.
For those who have a basic problem of understanding what is vat and foresee problems in maintaining detailed vat accounts then you can opt for the vat flat rate scheme provided you fulfillthe factors put in place by the tax authorities in your country. If your business is located in the UK then you can opt for vat flat rate in case your estimated sales turnover within the next year excluding vat isn’t over £150,000 or including vat isn’t over £187,500. You can 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 your vat figures on your sale or purchase as you might need to do under normal vat circumstances. You’ll, however be unable to go in for vat reclaim in case you opt for 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 offer goods or services that come under different vat rates then you will need to apply the top vat rate should you choose go for this scheme.
Thus, if you buy or sell services or goods under reduced vat rates or need to reclaim vat which has already been paid this scheme wouldn’t be suitable for you. However, should you mostly deal in services or goods that involve 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 will be perfect for both you and your business. You can get added time to concentrate on growing your organization instead of spending 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 need 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 studying the rules and completing the necessary vat form. You will probably need to find out the classification of the services and goods so that you can use the appropriate flat vat rate while billing your customers. You may also leave the scheme to migrate to a different vat scheme by informing the appropriate vat authorities before making your move.
Although the system of vat is rather easy to implement, you’ll still require the services of 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 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.