If your company 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 far from presenting vat figures fully detail. This scheme allows 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.
If you have a fundamental problem of being aware what is vat and foresee problems to maintain detailed vat accounts then you can certainly opt for the vat flat rate scheme provided you fulfill the criteria set up by the tax authorities inside your country. If your organization is located in Great Britain then you can certainly go for www.vatcontrol.com vat flat rate in case your estimated sales turnover in the next year excluding vat isn’t over £150,000 or including vat isn’t over £187,500. It is possible to remain under this scheme until your turnover touches £225,000.
Although you will still need 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 as you might need to do under normal vat circumstances. You will, however be unable to go in for vat reclaim just 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. If you happen to deal in services or goods that come under different vat rates then you will need to apply the highest vat rate should you choose opt 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 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 take part in retail sale then your vat flat rate scheme will be ideal for both you and your business. You can get added time to concentrate on growing your organization instead of passing time on vat calculations while filing your returns would also become simpler.
These rules apply to businesses choosing the scheme in the United Kingdom. You will need to review 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 also need to find out the classification of your services and goods so that you can make use of the appropriate flat vat rate while billing your clients. You can also leave the scheme to migrate to another vat scheme by informing the appropriate vat authorities before making your move.
Even though the system of vat is fairly easy to implement, you’ll still require the services of an expert vat agent or consultant to assist you with vat calculations, vat returns and vat refunds. However, in case your business format is fairly simple and you offer limited services or goods that fall under standard vat rates then you can go for the flat rate vat scheme to simplify your accounting.