In case your business is in a EU country that 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 Http://www.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 it is normally required when you file vat returns.
For those who have a basic problem of understanding what is vat and foresee problems to maintain detailed vat accounts then you can choose the vat flat rate scheme provided you fulfillthe factors set up by the tax authorities in your country. If your business is situated in the UK then you can certainly opt for vat flat rate in case your estimated sales turnover in 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 as part of your vat invoice, you need not keep an in depth account of your vat figures on the sale or purchase as you would have to do under normal vat circumstances. You will, however not be able to go for vat reclaim in case you opt for 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 deal in goods or services that fall under different vat rates then you’ll 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 that has recently been paid this scheme would not be suitable for you. However, if you mostly offer goods or services that involve standard vat rates, do not need to have any vat refund, or take part in retail sale then the vat flat rate scheme would be perfect for you and your business. You can get added time to concentrate on growing your organization rather than passing 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 review eu vat rules if your business is situated in another eu country. You can join the flat rate vat scheme in your country by studying the rules and completing the required vat form. You will also 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 relevant vat authorities prior to making your move.
Although the system of vat is rather simple to apply, you will still require services of an expert vat agent or consultant to help you with vat calculations, vat returns and vat refunds. However, if 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.