This scheme can be beneficial for businesses that have a low proportion of costs that include a VAT input tax charge, and their business turnover, excluding VAT, does not exceed £150,000.
One interesting feature of the scheme is that you do not have to leave the Flat Rate scheme until your annual income, including VAT, exceeds £230,000.
The only way you can make an effective choice, to join the scheme or not, is to rework your VAT position for say the last four quarters and see how a Flat Rate calculation compares to your current method.
If you have negligible input tax to reclaim, you are within the registration threshold, and the flat rate percentage that applies to your trade sector is favourable, then converting can produce real cash savings.
If you would like to see if your business could benefit we would be happy to help you crunch the numbers.
