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

In case your business is in an EU country which has adopted vat then you can opt for flat rate vat if you wish to simplify your accounting and also be away from presenting vat figures fully detail. 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 opt for the vat flat rate scheme provided you meet the criteria set up by the tax authorities in your country. In case your organization is located in the UK then you can certainly go for https://vatcontrol.com vat flat rate if your estimated sales turnover in 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 in your vat invoice, you need not keep a detailed account of the vat figures on the sale or purchase when you might need to do under normal vat circumstances. You will, however not be able to go for vat reclaim in case you choose the flat rate vat scheme. UK offers a 1% discount scheme for the 1st year for firms that choose this scheme. In case you deal in services or goods that fall under different vat rates then you will need to apply the top vat rate should you choose opt for this scheme.

Thus, if you buy or sell services or goods under reduced vat rates or have to reclaim vat which has recently been paid this scheme wouldn’t be suitable for you. However, if you mostly offer goods or services that entail standard vat rates, do not need to go in for 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 more time to focus on growing your business rather than passing time on vat calculations while filing your returns would also become simpler.

These rules pertain to businesses choosing the scheme in the United Kingdom. You will have to review eu vat rules if your organization is located in another eu country. You can join the flat rate vat scheme within your country by checking out the rules and completing the necessary vat form. You will also need to find out the classification of your goods and services to be able to use the appropriate flat vat rate while billing your clients. You may also leave the scheme to migrate to a different vat scheme by informing the relevant vat authorities before making your move.

Although the system of vat is fairly simple to apply, you will still require the 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 deal in limited goods or services that fall under standard vat rates you’ll be able to go for the flat rate vat scheme to simplify your accounting.