If your business is in an EU country which has adopted vat then you can opt for flat rate vat if you want to simplify your accounting and also be far from presenting vat figures in full detail Http://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.
If you have a basic problem of understanding what is vat and foresee problems to maintain detailed vat accounts then you can choose the vat flat rate scheme provided you meet the criteria set up by the tax authorities inside your country. If your business is situated in Great Britain then you can certainly opt for vat flat rate if your estimated sales turnover within the next year excluding vat is not over £150,000 or including vat isn’t over £187,500. It is possible to remain under this scheme until your turnover touches £225,000.
Even though you will still have to display the vat amount as part of your vat invoice, you don’t need to keep an in depth account of your vat figures on the sale or purchase as you might need to do under normal vat circumstances. You’ll, however not be able to go in for vat reclaim just in case you choose the flat rate vat scheme. UK offers a 1% discount scheme for the first year for firms that choose this scheme. If you happen to offer services or goods that come under different vat rates then you will need to apply the top vat rate should you choose opt for this scheme.
Thus, if you purchase or sell services or goods under reduced vat rates or need to reclaim vat that has recently been paid this scheme would not be suitable for you. However, should you mostly deal in services or goods that involve standard vat rates, do not need to go in for any vat refund, or take part in retail sale then the vat flat rate scheme would be ideal for you and your business. You can get more time to focus on growing your business instead of passing time on vat calculations while filing your returns would also become simpler.
These rules pertain to businesses choosing the scheme in the United Kingdom. You will need to check on eu vat rules if your organization 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 completing the required vat form. You will probably must find out the classification of the 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 relevant vat authorities prior to making your move.
Even though the system of vat is fairly simple to apply, you will still require services of an 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 basic and you offer limited goods or services that come under standard vat rates you’ll be able to go for the flat rate vat scheme to simplify your accounting.