Changes to the Flat Rate VAT Scheme
View this email in your browser
Hunts Accountants 2015 Budget Review
As you may be aware, HMRC have made changes to the flat rate VAT scheme which were finalised on 28th February 2017 and come into force on 1 April 2017. If you are registered for VAT, these changes may affect you. If you do not use or are not intending to use the flat rate, please disregard this email.

HMRC are changing the flat rate for ‘limited cost traders’. The new flat rate, as issued by HMRC, will be 16.5%. A limited cost trader is a business whose VAT inclusive expenditure on goods is either:
·         Less than 2% of their VAT inclusive turnover in a prescribed accounting period
·         Greater than 2% of their VAT inclusive turnover but less than £1,000 per annum.
When calculating the cost of ‘goods’ the following items are excluded:
·         Capital expenditure e.g. large items such as laptops, vans etc.
·         Food or drink for consumption by the flat rate business or its employees.
·         Vehicles, vehicle parts and fuel costs (except where the business is one that carries out      
          transport services and uses its own or a leased vehicle such as a taxi business.
·         Any services such as rent, accountancy and professional fees.
If you fall into the ‘limited cost trader’ definition, you can elect to move off of the flat rate VAT scheme and onto the standard rate VAT scheme, or you can stay on the new rate of 16.5%.
If you would like to stay on the flat rate VAT scheme at the new rate of 16.5%, you will effectively be paying 20% output VAT as follows:
Standard rate     Invoice £1,000     Standard VAT £200                      
Flat rate at 16.5%     Invoice £1,200     Flat rate VAT  £198
If you would like to change to the standard rate for VAT, you will be able to reclaim input VAT on your expenses but please bear in mind the additional time costs in calculating the VAT on your expenses each quarter.

Hunts are here to help and guide you through the minefield that is today's taxation regime. To discuss the VAT change and how it might affect or benefit your business, please give me a call on 01935 815008 or email

Very best

 Nick Hunt FMAAT
Hunts on Twitter
Visit our website
Email us
Copyright © 2017 Hunts Accountants, All rights reserved.

unsubscribe from this list    update subscription preferences 

This email was sent to <<Email Address>>
why did I get this?    unsubscribe from this list    update subscription preferences
Hunts Accountants · The Old Pump House · Oborne Road · Sherborne, Dorset DT9 3RX · United Kingdom

Email Marketing Powered by Mailchimp