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Using the Flat Rate Scheme you pay VAT as a fixed percentage of your VAT-inclusive turnover.

The actual percentage you use will depend on your type of business.

You can use the Flat Rate Scheme if:
  • Your business is registered for VAT and
  • You expect your VAT taxable turnover to be £150,000 or less, excluding VAT, in the next 12 months.

Benefits of using Flat Rate Scheme:

  • You won’t need to keep detailed records of sales and invoices, so you will spend less time record keeping.
  • If you’re in your first year of VAT registration, you’ll get a one percent reduction to your flat rate percentage which runs for the first 12 months following your VAT registration date.
  • There are fewer rules to follow and more certainty.

It may not be for you if:

  • You regularly receive a VAT repayment under standard VAT.
  • You make a lot of zero-rated or exempt sales.
  • You buy a lot of standard rated items.

You can join the scheme when you register online for VAT. If you’ve already registered for VAT you can join using form VAT600FRS.

Use the link below to find out more from GOV.UK:

Flat Rate Scheme

You can also join our live webinar: VAT Flat Rate Scheme and take a look at our online guide: VAT - How VAT works.