Changes to VAT flat rate scheme.

deejaybee

Have been on FRS for few years now, i am a self-employed courier.

When i saw the planned changes - i initially thought that i would be classed as a " limited cost trader" and hence my rate would increase from 10% to 16.5% and it would be pointless remaining on FRS.

However i noticed that although vehicle costs / fuel are not normally counted as "goods" - they ARE counted as "goods" for individuals in " Transport Business" .

So i guess my obvious question is : Would a courier be classed as being in " Transport Business " ? - its quite a vague definition really !

latinaid

On the list of categories, it specifically mentions couriers as being included in the Transport category (flat rate 10%). And as you say, if you're transport, then vehicle costs count as Goods (as long as the vehicle is yours or leased). Makes sense, after all, you wouldn't be able to do the job without the vehicle, which is going to be a major chunk of your costs.

Incidentally, I recently phoned the VAT people on behalf of one of my clients (I'm a book-keeper) to find out which category his business would fall into. (He's a satellite and aerial installer, which isn't specifically listed in their category list, nor does it obviously fit into any of the categories.) I was told that they couldn't advise me on which category his business should be in, and he should select whichever one he felt best fit. I asked what would happen if the Vat Man felt that the wrong category had been used, and was told that as long as he could give his reason for choosing it, and it made sense, than that would be acceptable. In other words, it's self-regulated, so whatever category you think is right, as long as it's reasonable, should be fine.

deejaybee

Thanks !

After i posted i found the section you referred to that specifically mentioned couriers ( doh ) - but always good to get confirmation from a qualified person :-)