If your company is in a EU country that 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 enables 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 whenever you file vat returns.
If you have a fundamental problem of understanding what is vat and foresee problems in maintaining 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 in your country. If your organization is located in Great Britain then you can certainly opt for http://vatcontrol.com vat flat rate if your estimated sales turnover within the next year excluding vat is not over £150,000 or including vat is not over £187,500. You can remain under this scheme until your turnover touches £225,000.
Although you will still have to display the vat amount in your vat invoice, you don’t need to keep an in depth account of your vat figures on your sale or purchase as you might need to do under normal vat circumstances. You will, however be unable to go in for vat reclaim in case you choose the flat rate vat scheme. UK also offers a 1% discount scheme for the 1st year for firms that opt for this scheme. In case you offer services or goods that fall under different vat rates then you’ll have to apply the top vat rate should you choose go for this scheme.
Thus, if you buy or sell services or goods under reduced vat rates or need to reclaim vat which has recently been paid this scheme wouldn’t be suitable for you. However, should you mostly deal in goods or services that entail standard vat rates, don’t need to go in for any vat refund, or take part in retail sale then your vat flat rate scheme would be ideal for you and your business. You could find added time to concentrate on growing your business instead of spending time on vat calculations while filing your returns would also become simpler.
These rules apply to businesses opting for the scheme in the United Kingdom. You will have to check on eu vat rules if your business is situated in another eu country. It is possible to join the flat rate vat scheme within your country by checking out the rules and filling out the required vat form. You will also need to find the classification of your services and goods so that you can make use of the appropriate flat vat rate while billing your clients. You may also leave the scheme to migrate to a different vat scheme by informing the appropriate vat authorities before making your move.
Even though the system of vat is rather easy to implement, you will still require services of expert vat agent or consultant to assist you with vat calculations, vat returns and vat refunds. However, if your business format is fairly simple and you deal in limited services or goods that come under standard vat rates you’ll be able to go in for the flat rate vat scheme to simplify your accounting.