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.
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.
Get regular content and resources for growing your business!
Close
We know that doing your Self Assessment can be a bit overwhelming. But it doesn't have to be that way. This guide will show you how to use the Coconut app to find the key numbers you need to fill in your tax return.
If you’re thinking of going freelance, whether full time or part time, here are seven important things that you should know…
No one starts a career in accounting to spend their days entering receipts…but that doesn’t stop some clients presenting you with a shoebox full of them when it’s time to do their tax return. Find out how Coconut will help you power through that particularly tedious task in no time.
.png)
.png)
