VAT BILLS CUT BY 35%
Businesses which dread their regular VAT return will be interested to know that by using the VAT Flat Rate Scheme they could both simplify the way that they complete their VAT returns and save money in the process. Some bed and breakfast businesses that have joined the scheme are already benefiting from a 35% reduction in their quarterly VAT bill.
Under the scheme, instead of calculating output VAT and input VAT in the usual way, a business simply works out its turnover for the period, and then pays a percentage of this over to Customs as its VAT bill. The percentage that most bed and breakfasts and hotels use is 9.5%, or 8.5% in their first year as a VAT registered business.
Businesses can still claim the input VAT back on goods costing over £2,000 that will be used on an ongoing basis by the business – such as a van or a large piece of equipment.
The scheme is targeted exclusively at smaller businesses – and only those with sales after VAT of less than £150,000 are able to sign up.
For more information on how your business can benefit from the Flat Rate Scheme contact Faye Armstrong at Dodd & Co Chartered Accountants on 01228 530913 or email faye@doddaccountants.co.uk.
For a guide to VAT registration for Small Busineses click here