Frequently asked questions
How does flat rate VAT work?
The flat rate scheme is aimed at simplifying VAT. You pay VAT to HMRC as a flat rate percentage on your gross sales including normal VAT.
The flat rate percentages vary depending on your business activity. Under the flat rate scheme you can not reclaim VAT on your purchases and expenses, but you can on larger capital purchases of equipment over £2,000.
Once you enter the flat rate scheme you are free to leave at any time, but then can not re-enter the scheme for 12 months.
