In case your business is in an 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 far from presenting vat figures in full 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 fundamental problem of being aware what is vat and foresee problems in maintaining detailed vat accounts then you can certainly choose the vat flat rate scheme provided you fulfillthe factors put in place by the tax authorities inside your country. In case your business is located in Great Britain then you can certainly opt for vat flat rate in case your estimated sales turnover in 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.
Even though 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 when you might need to do under normal vat circumstances. You’ll, however not be able to go in for vat reclaim in case you opt for the flat rate vat scheme. UK offers a 1% discount scheme for the first year for businesses that opt for this scheme. In case you offer services or goods that fall under different vat rates then you’ll have to apply the top vat rate should you choose go for this scheme.
Thus, if you buy or sell services or goods under reduced vat rates or have to reclaim vat that has already been paid this scheme wouldn’t be suitable for you. However, should you mostly offer goods or services that entail standard vat rates, don’t need to have any vat refund, or engage in retail sale then the vat flat rate scheme will be perfect for you and your business. You can get added 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 in case your business is located in another eu country. It is possible to join the flat rate vat scheme within your country by studying the rules and filling out the necessary vat form. You will probably need to 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 prior to making your move.
Although the system of vat is fairly easy to implement, 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 services or goods that come under standard vat rates you’ll be able to go in for the flat rate vat scheme to simplify your accounting.