You can opt for flat rate vat in order to simplify your accounting

If your company is in a EU country that has adopted vat then you can opt for flat rate vat if you wish to simplify your accounting and stay far from presenting vat figures fully detail. 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 is normally required when you file vat returns.

For those who have a fundamental problem of understanding what is vat and foresee problems in maintaining detailed vat accounts then you can opt for the vat flat rate scheme provided you fulfill the criteria vatverification.com put in place by the tax authorities inside your country. If your business is located in the UK then you can opt for vat flat rate in case your estimated sales turnover within the next year excluding vat is not over £150,000 or including vat is not over £187,500. It is possible to remain under this scheme until your turnover touches £225,000.

Although you will still have to display the vat amount in your vat invoice, you don’t need to keep an in depth account of the vat figures on the sale or purchase when you would have to do under normal vat circumstances. You will, however not be able to go for vat reclaim just in case you opt for the flat rate vat scheme. UK also offers a 1% discount scheme for the first year for firms that opt for this scheme. If you happen to deal in goods or services that come under different vat rates then you will have to apply the top vat rate should you choose go for this scheme.

Thus, if you purchase or sell goods or services under reduced vat rates or have to reclaim vat which has already been paid then this scheme wouldn’t be ideal for you. However, should you mostly offer services or goods that entail standard vat rates, do not need to go in for any vat refund, or engage in retail sale then the vat flat rate scheme would be perfect for both you and your business. You could find added time to concentrate on growing your business instead of passing 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 need to review eu vat rules in case your business is situated in another eu country. It is possible to join the flat rate vat scheme within your country by checking out the rules and completing the required vat form. You will also must find the classification of your services and goods so that you can use the appropriate flat vat rate while billing your clients. You may also leave the scheme to migrate to another vat scheme by informing the relevant vat authorities prior to making your move.

Even though the system of vat is fairly easy to implement, you’ll still require services of 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 then you can go in for the flat rate vat scheme to simplify your accounting.