vat schemes

System
System Posts: 100,537 🤖 Admin 🤖
edited June 9 in AAT member discussion
i know that there are a number of vat schemes, but how do you decide which one to use for different business, ie for a shop or a takeaway or for what ever the business might be.

thanks!

Comments

  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:vat schemes

    VAT schemes cannot be tailored to a particular business. There are rules and thresholds (usually in turnover terms) which have to be followed.

    For example, a business with a turnover of £600,000 (at the last check) or more has to be on invoice accounting (VAT is liable and re-claimable on raising or receipt of an invoice). Turnover of less than this can enable a business to go on cash accounting (i.e. vat payable when customer pays and vat reclaimable when supplier is paid). I would imagine that a shop/takeaway and similar may be eligible for cash accounting. There are other schemes e.g. annual accounting and the flat rate scheme.

    The best bet is to check the website www.hmrc.co.uk and see which scheme is applicable to your business.

    Regards
    Steve
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:vat schemes

    Are you talking about cash accounting/standard accounting or the flat rate schemes?????

    As Peugeot says there are t/over rules about using cash accounting - it is only worthwhile using cash accounting if you give people credit, and your supplies wont!

    As regards the flat rate schemes - i have yet to find one that has worked to the benefit of my client - if they did I suppose that HMRC wouldnt allow that particular rate! The only benefit that I can see is that as long as you calculate the rate correctly then you can't get nailed at a rate inspection!

    Claudia

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