If your business is in an EU country that has adopted vat you’ll be able to choose flat rate vat if you wish to simplify your accounting and stay far 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 it 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 choose the vat flat rate scheme provided you fulfillthe factors www.vatverification.com put in place by the tax authorities in your country. If your business is located in Great Britain then you can 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. It is possible to remain under this scheme until your turnover touches £225,000.
Although you will still have to display the vat amount as part of your vat invoice, you need not keep a detailed account of the vat figures on your sale or purchase when you would have to do under normal vat circumstances. You’ll, however be unable to go for vat reclaim just in case you choose the flat rate vat scheme. UK offers a 1% discount scheme for the 1st year for businesses that choose this scheme. In case you deal in goods or services that come under different vat rates then you will need to apply the highest 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 recently been paid this scheme would not be ideal for you. However, if you mostly deal in services or goods that entail standard vat rates, do not need to go in for any vat refund, or engage in retail sale then the vat flat rate scheme will be ideal for you and your business. You can get more time to focus on growing your business instead of spending 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 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 need to find out the classification of the goods and services to be able to make use of the appropriate flat vat rate while billing your clients. 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 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, in case your business format is fairly basic and you offer limited goods or services that come under standard vat rates you’ll be able to go for the flat rate vat scheme to simplify your accounting.