If your business is in an EU country that has adopted vat then you can choose 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 amount of your vat inclusive sales as being 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 basic problem of being aware what is vat and foresee problems in maintaining detailed vat accounts then you can certainly choose 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 the UK then you can certainly 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. It is possible to remain under this scheme until your turnover touches £225,000.
Even though 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 the sale or purchase when you would have to do under normal vat circumstances. You’ll, however be unable to go in for vat reclaim just in case you choose the flat rate vat scheme. UK also offers a 1% discount scheme for the 1st year for firms that choose this scheme. In case you offer goods or services that fall under different vat rates then you will need to apply the top vat rate if you do opt for this scheme.
Thus, if you purchase or sell goods or services under reduced vat rates or need to reclaim vat which has already been paid then this scheme would not be suitable for you. However, if you mostly offer services or goods that entail standard vat rates, do not need to have any vat refund, or engage in retail sale then your vat flat rate scheme would 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 choosing the scheme in the UK. You will have to check on eu vat rules in case your business is located in another eu country. You can join the flat rate vat scheme in your country by studying the rules and filling out the required vat form. You will also need to find the classification of the goods and services to be able to 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 relevant vat authorities before making your move.
Even though the system of vat is rather easy to implement, you will still require services of an expert vat agent or consultant to help you with vat calculations, vat returns and vat refunds. However, in case your business format is kind of basic and you offer limited goods or services that come under standard vat rates then you can go in for the flat rate vat scheme to simplify your accounting.