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

If your business is in a EU country which has adopted vat you’ll be able to opt for flat rate vat if you wish to simplify your accounting and stay 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 it is normally required whenever you file vat returns.

For those who have a basic problem of being aware 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 put in place by the tax authorities in your country. In case your business is situated in the UK then you can certainly go for vat control vat flat rate if your estimated sales turnover in 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.

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 your sale or purchase when you would have to do under normal vat circumstances. You will, however be unable to go in for vat reclaim in case you choose 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 deal in goods or services that come under different vat rates then you’ll need to apply the highest vat rate should you choose go for this scheme.

Thus, if you purchase or sell goods or services under reduced vat rates or need to reclaim vat that has already been paid this scheme wouldn’t be ideal for you. However, should you mostly deal in goods or services that involve standard vat rates, do not need to go in for any vat refund, or engage in retail sale then the vat flat rate scheme will be ideal for you and your business. You can get more time to concentrate on growing your business rather than spending time on vat calculations while filing your returns would also become simpler.

These rules apply to businesses opting for the scheme in the UK. You will have to check on eu vat rules in case your organization is located in another eu country. It is possible to join the flat rate vat scheme in your country by studying the rules and filling out the required vat form. You will also must find out the classification of your services and goods 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 appropriate vat authorities before making your move.

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