What Are the Standard Rate & Flat Rate VAT Schemes?
play_circle

What Are the Standard Rate & Flat Rate VAT Schemes?

When you’re self-employed and VAT-registered, you can choose between the standard or flat rate VAT schemes. Here’s what you need to know about both.

No items found.

Standard Rate VAT Scheme

On the Standard Rate VAT Scheme, you charge VAT on invoices (usually 20%) and pay this over to HMRC. You can reduce the amount you pay by claiming the VAT you pay on allowable expenses.

On this scheme, you have to keep track of the VAT you charge on your invoices, and also the VAT you pay on expenses.

If you earn over £85,000, you must register for VAT.

Learn more on gov.uk.

Flat Rate VAT scheme

If you earn under £150,000, you can opt to use the Flat Rate Scheme instead of the Standard Rate Scheme.

It’s intended to be a simpler way to manage your VAT, as instead of keeping track of VAT on all income and expenses, there is a different calculation.

You still charge the relevant VAT rate on your sales (usually 20%). Then each VAT period, you add up your total sales including VAT, and multiply it by the relevant flat rate for your industry.

Learn more on gov.uk.

If you’re unsure which is best for you, speak to your accountant or tax advisor.

Tags

No items found.

Keep reading

Six ways to add value to your relationships with your small-landlord clients

Adding real value to the relationships you have with your small-landlord clients can be a good way to ensure their loyalty. They might also be more willing to leave positive reviews about you online and recommend you to others. So, how could you add value to your relationships with your small-landlord clients?

arrow_right

Five ways to make your life easier and save time if you’re self-employed

It’s important to try to find ways to make your life easier and save time during your working day so that you can enjoy a healthier work-life balance and spend more time with your loved ones. So, what could make your life easier and save you time?

arrow_right

Use GoSimpleTax for FREE and save time on your client Self Assessment tax returns

Coconut is an easy-to-use accounting software solution that enables sole traders and landlords to conveniently record their income, track their expenses (so they don’t forget to reclaim any), manage their invoicing and work out how much to set aside for tax. Coconut gives your clients far greater control over their cash flow and finances, which brings peace of mind. If your sole trader and landlord clients use Coconut, it also saves you time, effort and hassle, of course. It’s a classic win-win. Well, things are about to get even better thanks to the integration of Coconut and GoSimpleTax.

arrow_right