VAT Flat Rate Scheme

The VAT flat rate scheme is designed to make it simpler and quicker for small businesses to complete their VAT return.

This is because VAT payable to HMRC is calculated as a particular percentage of the gross turnover of the business and not as the difference between VAT on individual sales and purchases.

In particular there is no need to record the VAT incurred on most purchases and determine whether it is reclaimable or not, so there is less chance of  error.

The amount of VAT charged to customers remains the same whether using the flat rate scheme or not.

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