Should you be using the VAT Flat Rate Scheme?

Follow the steps below to find out if the VAT Flat Rate Scheme (FRS) is a good fit for your business.

Different types of businesses pay a different flat rate percentage under the VAT Flat Rate Scheme. Use the drop-down menu to select the appropriate category for your business. If you’re a limited cost trader, select that option instead.

2. Check your most recent VAT return for these amounts

You’ll find the numbers for the fields above in boxes one, five and six on your most recent VAT return.

This box is for any VAT claimed on capital assets purchased for your business during the same VAT period as above. If you didn’t claim any VAT on capital assets leave it blank.

Now for the exciting bit – could you be better off on the Flat Rate Scheme?

What is the VAT Flat Rate Scheme?

The VAT Flat Rate Scheme (FRS) is an alternative way for small businesses to work out how much VAT to pay to HMRC.

If you’re not using the Flat Rate Scheme, the amount you pay to HMRC each quarter will be the difference between the VAT that you’ve charged to your customers and the VAT you’re able to reclaim on your supplier bills.

If you use the Flat Rate Scheme, the amount of VAT you pay is calculated as a percentage of your total sales.

Find out more about the Flat Rate Scheme on our accounting glossary.

Looking for a basic VAT calculator?

Add or remove VAT at the standard or reduced rate with this simple VAT calculator.

Need a hand with VAT?

Find out how FreeAgent’s VAT features can save you bucket-loads of hassle.

*Disclaimer: We have made every attempt to make sure that the calculations are correct but FreeAgent Central Ltd cannot be held responsible for incorrect output from this calculator or for the outcome of any decisions you make as a result of using it. Full terms and conditions.

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