If your business is in a EU country which 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 Vatcheck.com. This scheme allows you to simply calculate a prescribed percentage 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.
For those who have a basic problem of being aware what is vat and foresee problems to maintain detailed vat accounts then you can certainly choose the vat flat rate scheme provided you meetthe factors put in place by the tax authorities inside your country. In case your organization is located in the UK then you can certainly go for vat flat rate if 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 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 as you might need to do under normal vat circumstances. You’ll, however not be able to go in for vat reclaim just in case you choose the flat rate vat scheme. UK offers a 1% discount scheme for the first year for firms that choose this scheme. In case you offer goods or services that come under different vat rates then you will need to apply the top vat rate should you choose 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 this scheme would not be ideal for you. However, if you mostly deal in services or goods that entail standard vat rates, don’t need to go in for any vat refund, or engage in retail sale then your vat flat rate scheme will be ideal for you and your business. You can get more time to focus on growing your business rather than spending time on vat calculations while filing your returns would also become simpler.
These rules apply to businesses choosing the scheme in the United Kingdom. You will have to check on eu vat rules in case your organization is situated in another eu country. You can join the flat rate vat scheme in your country by checking out the rules and completing the necessary vat form. You will probably must find out the classification of the services and goods to be able to use the appropriate flat vat rate while billing your customers. You can also leave the scheme to migrate to a different vat scheme by informing the appropriate vat authorities prior to making your move.
Although the system of vat is fairly easy to implement, you’ll still require services of an 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 fall under standard vat rates you’ll be able to go in for the flat rate vat scheme to simplify your accounting.