NEONATOLOGIST MD JOBS ARLINGTON

The Flat Rate VAT scheme is available to businesses with a taxable turnover below Ј150,000 excluding VAT (also exempt and non-taxable sales should be below Ј37,500).

Under the flat rate scheme, you simply keep a percentage of the VAT charged to your customers. The percentage you keep varies depending upon which industry you are in.

1. You ignore VAT on your purchases, the VAT you pay simply becomes a cost. Eg If you spend Ј10 + VAT on stationery, the cost of that stationery becomes Ј11.75.
2. The flat rate scheme does allow you to reclaim the VAT on 'large' capital items - where you spend more than Ј2,000 you can reclaim the VAT on that item. Should I be on the flat rate scheme?

As you claim a percentage of sales, those with higher sales stand to benefit more. Those with low purchases (therefore paying little in reclaimable input tax) also stand to gain from the scheme.

For example A business with sales of Ј149,000 (excluding VAT) and in the category of "any other activity not listed elsewhere" - 10% flat rate and with negligible input VAT say Ј500 will save Ј8,068 per annum by switching to the Flat Rate VAT scheme.

To see how much you might save, try the Flat Rate VAT scheme calculator