Are you on the flat rate scheme for VAT?

Slinky

Don't assume you're returning to the VAT rate you were on prior to the 17.5%/15%/17.5% changes.

I used to pay 9%, this dropped to 8% this year, next year it goes up to 10%. Not best pleased.

http://www.hmrc.gov.uk/pbr2009/pbrn33.htm

amberene

I would be excited about mine staying the same, but at 13% it *is* the highest

Ever so glad my VAT period is 12 09 so I don't have to do some clever maths next year

ukbill69

Dont see what the point is really, dont hit the threshold of 60k, then dont register, unless you want to claim back your vat expenses and you also trade to businesses.

System

I'm under the threshold but as everything I charge for comes under the normal VAT rate (nothing exempt or 0 rated) then I make a profit out of the government

QTC

Yes, I was paying 9%, it went down to 8%, and from 1/1/2010 it has been 9.5%..a 0.5% tax rise on my turnover.

Has every sector on the flat rate scheme gone up?

grey_lady

Mine's gone down 0.5% - I suspect a trick.

Jimbo333_2

ukbill69 wrote: »

Dont see what the point is really, dont hit the threshold of 60k, then dont register, unless you want to claim back your vat expenses and you also trade to businesses.

17.5% invoiced to client - 12.5% paid to HMRC = 5% in my pocket (well, in my Ltd Co business to be accurate).:beer:

Free money- what isn't to see? This is MoneySavingExpert.com ....

kalaika

Jimbo333 wrote: »

17.5% invoiced to client - 12.5% paid to HMRC = 5% in my pocket (well, in my Ltd Co business to be accurate).:beer:

Free money- what isn't to see? This is MoneySavingExpert.com ....

The 'free money' isn't quite as easy as that though is it!;) The 5% is not completely in your pocket as this is offset by the amount of vat on your purchases that you can't reclaim.

For example (assuming that the flat rate percentage for you is 12.5% and you are VAT registered), if you buy something at £100 plus VAT and sell it for £800 plus VAT, then you are better off on the flat rate scheme (£705 gross profit versus £700). But, if you buy at £200 plus VAT and sell it for £800 plus VAT, then you are worse off on the flat rate scheme (£587.50 gross profit versus £600).

It all depends on individual circumstances...

Jimbo333_2

kalaika wrote: »

The 'free money' isn't quite as easy as that though is it!;) The 5% is not completely in your pocket as this is offset by the amount of vat on your purchases that you can't reclaim.

For example (assuming that the flat rate percentage for you is 12.5% and you are VAT registered), if you buy something at £100 plus VAT and sell it for £800 plus VAT, then you are better off on the flat rate scheme (£705 gross profit versus £700). But, if you buy at £200 plus VAT and sell it for £800 plus VAT, then you are worse off on the flat rate scheme (£587.50 gross profit versus £600).

It all depends on individual circumstances...

Indeed. I'm service based, so the flat rate scheme is better. For others, as you say, best not to go flat rate. But to not be registered at all unless over the VAT threshold....??

Slinky

I'm invoicing at 17.5, paying taxman 10% and very happily paying almost no VAT on my outgoings at all as my biggest expense is zero rated, and my third biggest expense is postage which is also exempt.

kalaika

Jimbo333 wrote: »

...But to not be registered at all unless over the VAT threshold....??

Yeah, I agree. Often there's a strong case for registering, even if you are under the threshold.