If your company is in an EU country which has adopted vat you’ll be able to opt for flat rate vat if you want to simplify your accounting and also be away from presenting vat figures fully detail Www.vatcheck.com. This scheme enables you to simply calculate a prescribed percentage of your vat inclusive sales as the final vat figure without going into intricate sale or purchase details, as is normally required when you file vat returns.
For those who have a fundamental problem of understanding what is vat and foresee problems in maintaining detailed vat accounts then you can certainly choose the vat flat rate scheme provided you meet the criteria put in place by the tax authorities in your country. In case your organization is situated in the UK then you can certainly go for vat flat rate in case your estimated sales turnover in the next year excluding vat is not over £150,000 or including vat is not over £187,500. It is possible to remain under this scheme until your turnover touches £225,000.
Although you will still have to display the vat amount as part of your vat invoice, you need not keep a detailed account of the 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 opt for the flat rate vat scheme. UK offers a 1% discount scheme for the 1st year for firms that opt for this scheme. In case you offer services or goods that come under different vat rates then you will have to apply the top vat rate should you choose go for this scheme.
Thus, if you purchase or sell goods or services under reduced vat rates or need to reclaim vat that has already been paid this scheme wouldn’t be suitable for you. However, should you mostly deal in services or goods that entail standard vat rates, don’t need to have any vat refund, or take part in retail sale then your vat flat rate scheme would be perfect for you and your business. You could find added time to focus on growing your organization instead of passing time on vat calculations while filing your returns would also become simpler.
These rules apply to businesses choosing the scheme in the United Kingdom. You will need to check on eu vat rules if your organization is located in another eu country. You can join the flat rate vat scheme in your country by studying the rules and completing the necessary vat form. You will also need to find out the classification of your services and goods to be able to 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 relevant vat authorities before making your move.
Even though the system of vat is fairly easy to implement, you will still require services of expert vat agent or consultant to help you with vat calculations, vat returns and vat refunds. However, in case your business format is kind of 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.