![]() ![]() The main advantage of the scheme is that it is simple and that it saves work. If this is the case, the trader must leave the flat rate scheme and work out VAT due to HMRC in the usual way. ![]() Once in the scheme, a trader can remain unless their turnover in the last 12 months was more than £230,000 including VAT, or they expect their turnover in the next 30 days alone to be more than £230,000 (including VAT). A trader cannot re-join the scheme if they have left it in the previous 12 months. ![]() This is the total of everything that they sell that is not exempt from VAT, and is exclusive of VAT. The scheme is only open to VAT-registered businesses which expect their annual VAT taxable turnover to be £150,000 or less. The percentage that they pay is set by HMRC and depends on the business sector in which they operate. Under the scheme, traders pay a percentage of their VAT-inclusive turnover over to HMRC, rather than working out the difference between their output VAT and their input VAT. However, while it may save work, it may also cost more than working out VAT in the traditional way. The flat rate scheme offers VAT registered traders who meet the eligibility conditions a simpler way to work out the VAT that they need to pay over to HMRC. ![]()
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