VAT Flat Rate Scheme Calculator available online – Important Changes Reminder
As previously advised last year, the VAT Flat Rate Scheme will change with effect from 1 April 2017.
Any business which is classed as a “Limited Cost Trader” will need to apply a future Flat Rate of 16.5% against its turnover instead of its current reduced flat rate. A “Limited Cost Trader” is a business where costs are either:
- less than 2% of their VAT inclusive turnover in a prescribed accounting period.
- greater than 2% of their VAT inclusive turnover but less than £1000 per annum if the prescribed accounting period is one year (if it is not one year, the figure is the relevant proportion of £1000).
HMRC have provided an online calculator to allow businesses to determine the rate at which the business should be paying VAT. This can be found at:
No U-turns are expected on this change.