Flat Rate

[Chris P]

Just going Vat registered and would be interested to hear peoples views on the flat rate scheme, I take it everyone would be on 9%.

 

Anyone got any horror stories or good news about Vat.

 

I'm still a bit in the dark about this one so any views or opinions would be most welcome.

[Tom D]

Don't know much about flat rate but i'd say just register for the full rate. I did last year and I'm snowed under with work, I was worried that I might loose jobs but it has'nt really happened. plus i was able to claim back over £7000 in vat that i had paid out on equipment in the previous three years. you can also claim fees and services for the last six months. As to the VAT you charge this goes on top of your norml rate so you get a 17.5% discount on everything that you buy but you still make the same money.

 

One more tip; work out the VAT before giving a customer the price, then if they baulk at it you can say "that includes the VAT" which seems like a better deal than saying its £xxx +VAT.

[Quickthorn]

The flat rate scheme works for me, I'm on 9%, and that's worth £500 per year extra compared to normal VAT. It might not suit if you do a lot of work where you supply materials, eg landscaping, planting, because you lose out unless you mark up the supplies sufficiently. Also, if you do zero rated supplies (eg. NPTC assessor fees), you lose on that. I'd suggest you go for cash accounting on VAT, so you don't have to pay them until you've had your money from the customer.

 

Also, if it's your first year on the flat rate scheme, you were allowed a 1% discount off your rate for that first year. Not sure if that's still the case.

 

Hope that helps..

[Chris P]

Good stuff tom d and quickthorn. sounds like not a bad deal at the moment . I had a lengthy phone chat with the accountant today and it all seems like its gonna go ahead.

lets see what happens.

[skyhuck]

Flat rate works for me,good luck!!