It is possible to opt for flat rate vat in order to simplify your accounting

If your company is in an EU country that has adopted vat then you can opt for flat rate vat if you wish to simplify your accounting and also be away from presenting vat figures in full detail Http:// This scheme enables you to simply calculate a prescribed amount of your vat inclusive sales as being the final vat figure without going into intricate sale or purchase details, as it is normally required whenever you file vat returns.

For those who have a basic problem of understanding what is vat and foresee problems to maintain detailed vat accounts then you can certainly choose the vat flat rate scheme provided you fulfill the criteria set up by the tax authorities inside your country. If your business is located in the UK then you can certainly go for vat flat rate if your estimated sales turnover in the next year excluding vat is not over £150,000 or including vat is not over £187,500. You can remain under this scheme until your turnover touches £225,000.

Even though you will still need to display the vat amount in your vat invoice, you need not keep a detailed account of the vat figures on the sale or purchase as you might need to do under normal vat circumstances. You will, however not be able to go in for vat reclaim in case you choose the flat rate vat scheme. UK also offers a 1% discount scheme for the first year for firms that choose this scheme. In case you deal in services or goods that come under different vat rates then you’ll need to apply the highest vat rate should you choose go for this scheme.

Thus, if you buy or sell goods or services under reduced vat rates or need to reclaim vat which has recently been paid this scheme wouldn’t be ideal for you. However, if you mostly offer goods or services that entail 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 will be ideal for both you and your business. You can get added time to concentrate on growing your organization rather than passing time on vat calculations while filing your returns would also become simpler.

These rules pertain to businesses opting for the scheme in the UK. You will need to review eu vat rules in case your business is situated in another eu country. You can join the flat rate vat scheme in your country by studying the rules and completing the necessary vat form. You will also must find out the classification of the services and goods to be able to use the appropriate flat vat rate while billing your clients. You can also leave the scheme to migrate to a different vat scheme by informing the appropriate vat authorities before making your move.

Even though the system of vat is rather easy to implement, you’ll still require services of expert vat agent or consultant to help you with vat calculations, vat returns and vat refunds. However, if your business format is fairly basic and you deal in limited services or goods that fall under standard vat rates you’ll be able to go for the flat rate vat scheme to simplify your accounting.