You can choose flat rate vat if you want to simplify your accounting

In case your company is in an EU country which has adopted vat you’ll be able to opt for flat rate vat if you want to simplify your accounting and also be far from presenting vat figures in full detail. This scheme enables 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.

If you 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 inside your country. If your business is located in Great Britain 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. You can remain under this scheme until your turnover vatnumbersearch.com touches £225,000.

Although you will still need to display the vat amount in your vat invoice, you need not keep an in depth account of the vat figures on your sale or purchase when you would have to do under normal vat circumstances. You’ll, 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 businesses that opt for this scheme. If you happen to deal in goods or services that fall under different vat rates then you will have to apply the highest vat rate if you do 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 suitable for you. However, should you mostly deal in services or goods that involve standard vat rates, do not 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 could find more time to focus on growing your organization rather than spending time on vat calculations while filing your returns would also become simpler.

These rules pertain to businesses opting for the scheme in the United Kingdom. You will need to check on eu vat rules if your organization is situated in another eu country. You can join the flat rate vat scheme in your country by studying the rules and filling out the necessary vat form. You will also must find out the classification of your goods and services so that you can use 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.

Although the system of vat is rather simple to apply, you’ll still require the services of an expert vat agent or consultant to assist you with vat calculations, vat returns and vat refunds. However, if your business format is kind of simple and you offer limited services or goods that fall under standard vat rates then you can go in for the flat rate vat scheme to simplify your accounting.