It is possible to choose flat rate vat if you want to simplify your accounting

If 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 stay away from presenting vat figures in full detail This scheme enables you to simply calculate a prescribed percentage of your vat inclusive sales as being the final vat figure without going into intricate sale or purchase details, as it is normally required whenever you file vat returns.

If you have a fundamental problem of being aware what is vat and foresee problems to maintain detailed vat accounts then you can certainly choose the vat flat rate scheme provided you fulfill the criteria set up by the tax authorities inside your country. In case your organization is located in Great Britain then you can certainly go for vat flat rate if your estimated sales turnover within the next year excluding vat isn’t 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 an in depth account of your vat figures on your 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 first year for firms that choose this scheme. If you happen to deal in services or goods 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 goods or services under reduced vat rates or need to reclaim vat which has already been paid this scheme would not be suitable for you. However, if you mostly deal in services or goods that entail standard vat rates, do not need to have any vat refund, or engage in retail sale then your vat flat rate scheme would be ideal for you and your business. You could find added time to focus on growing your business instead of passing 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 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 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.

Even though the system of vat is rather easy to implement, you’ll still require the services of an expert vat agent or consultant to help you with vat calculations, vat returns and vat refunds. However, in case your business format is kind of basic and you deal in limited services or goods that come under standard vat rates then you can go for the flat rate vat scheme to simplify your accounting.