Posted: 25/07/11 by D N G Dove Naish
Local accountants DNG Dove Naish are advising smaller businesses with a turnover below £150,000, to take a look at the VAT Flat Rate Scheme. This alternative method of working out how much VAT you pay each quarter can produce cash savings.
Victoria New of DNG Dove Naish said: “HMRC offer smaller businesses simplified ways to account for VAT - the so called special schemes. Unless you opt to apply one of the special VAT schemes, like the Flat Rate Scheme, you will pay VAT based on the difference between the VAT you add to your sales and the VAT you pay on goods and services that you buy. If you apply to use the Flat Rate Scheme you still add VAT at the appropriate rate to all your sales but your quarterly bill is calculated by multiplying your turnover including VAT by a fixed percentage rate, the Flat Rate. The rate varies according to the type of business you run.
“What smaller businesses seem to be missing is that applying the Flat Rate Scheme can save you cash. The key is to find out which flat rate applies to your business and work out your annual VAT based on the standard and Flat Rate methods. Not all businesses will benefit. However, if your turnover is below £150,000 and certain other criteria apply, it is worth crunching the numbers to see if savings can be made.”
DNG Dove Naish are happy to talk to any small business owner who thinks they may be missing this opportunity. Every little helps!