What is VAT?
Value added tax or VAT as it is known is a tax payable on goods or services which a VAT registered business provides. The standard VAT rate is currently 20%. You must register for VAT if you have sales of over £82,000.
VAT flat rate scheme
The VAT flat rate scheme is a scheme which HMRC have put in place to allow businesses who do not incur much purchase VAT to take advantage of only paying over a percentage of VAT incurred on sales.
Below is some of the most common Flat Rate Percentages;
Architect, civil and structural engineer or surveyor 14.5%
Computer and IT consultancy or data processing 14.5%
Photography 11%
Financial services 13.5%
Film, radio, television or video production 13%
Management consultancy 14%
You can find a detailed list of flat rate percentages here:
http://www.hmrc.gov.uk/manuals/frsmanual/FRS7300.htm
Also don’t forget that you will receive a 1% discount in the first year!
