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By (user no longer on site)
over a year ago
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"I'm looking at the business type and the percentages, do i want to choose one with a higher or lower rate?"
Didn't know you had a choice with VAT, if you turn over to much in a year you have to pay VAT |
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By (user no longer on site)
over a year ago
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If you register for VAT you can opt to go for the flat rate. The flat rate method allows you to charge vat at 20% and only have to pay a certain percentage to hmrc for example 12%. Each industry is treated differently however you cannot claim vat on any expenses. Makes sense? |
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By (user no longer on site) OP
over a year ago
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"If you register for VAT you can opt to go for the flat rate. The flat rate method allows you to charge vat at 20% and only have to pay a certain percentage to hmrc for example 12%. Each industry is treated differently however you cannot claim vat on any expenses. Makes sense? "
Yep, sorted ta.  |
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"I guess my question really is "what does the rate mean?""
Rather than pay HMRC the total collected minus paid, you pay a flat rate and keep (yeah right) any spare.
You dont choose the rate, it depends on what you do.
https://www.gov.uk/vat-flat-rate-scheme/how-much-you-pay
Mr ddc |
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By *ames6ft5Man
over a year ago
North London / Herts |
Flat rate scheme is allowable to join if annual revenue is less than £150k
Essentially you charge your clients 20% VAT on the billable amount, by you just pay the tax man a lower calculation depending on your business type - say 13% of the total including VAT.
So can work to your considerable advantage if you would ordinarily have few vat rates expenses, and simplifies admin for you and HMRC. For HMRC encourages companies to register for VAT. There are different rates depending on how you register.
Here is an example:
Standard VAT Calculation
Total Billings £50,000
Output VAT 20% £10,000
Total invoiced £60,000
VAT reclaimed through purchases £750
Total payable to HMRC £9,250
Flat Rate Scheme Calculation
Total Billings £50,000
Output VAT 20% £10,000
Total invoiced £60,000
Total payable to HMRC at 14.5% of T/O £8,700
In addition, if you are in your first year of vat registration you can benefit from a 1% reduction to your FRS rate.
James |
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By (user no longer on site) OP
over a year ago
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"I guess my question really is "what does the rate mean?"
Rather than pay HMRC the total collected minus paid, you pay a flat rate and keep (yeah right) any spare.
You dont choose the rate, it depends on what you do.
https://www.gov.uk/vat-flat-rate-scheme/how-much-you-pay
Mr ddc"
Well the trouble i had was part of my business is manufacturing vehicles and part of it is repairing them. 2 different rates.
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"I guess my question really is "what does the rate mean?"
Rather than pay HMRC the total collected minus paid, you pay a flat rate and keep (yeah right) any spare.
You dont choose the rate, it depends on what you do.
https://www.gov.uk/vat-flat-rate-scheme/how-much-you-pay
Mr ddc
Well the trouble i had was part of my business is manufacturing vehicles and part of it is repairing them. 2 different rates.
"
You would normally agree which rate to use with your tax-man, based on which forms the greater part of the business. If it is even close to 50%, I'd push to use the lower rate.
(Assuming all run as one business) |
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By (user no longer on site) OP
over a year ago
|
"I guess my question really is "what does the rate mean?"
Rather than pay HMRC the total collected minus paid, you pay a flat rate and keep (yeah right) any spare.
You dont choose the rate, it depends on what you do.
https://www.gov.uk/vat-flat-rate-scheme/how-much-you-pay
Mr ddc
Well the trouble i had was part of my business is manufacturing vehicles and part of it is repairing them. 2 different rates.
You would normally agree which rate to use with your tax-man, based on which forms the greater part of the business. If it is even close to 50%, I'd push to use the lower rate.
(Assuming all run as one business)"
I'm definetly feeling more repairy than makey.. |
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By *obka3Couple
over a year ago
bournemouth |
Unless you have a small business and very few expenses then it almost always pays to do it the normal way, if you are buying bits then there will be vat on it which you will not be able to claim back if you go on the flat rate scheme, and while I am not involved in that part of VAT I cant see why they would allow you to charge different rates for different parts of your business if you run ONE business, if its two different ones perhaps, the only companies that charge different rates are one supplying energy as small amounts are 5% and bigger ones 20%, most of my sales are exempt as its animal food related. VAT can be very complicated at times though |
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I didn't decide that!! 
hardly a luxury. 
Just remember Trigger's broom
