Did you know you may be able to opt out of the usual method of paying VAT for your business? If your business qualifies you could be in with an opportunity to switch over to flat rate VAT instead of staying with the present system.
In order to qualify your turnover would have to be below the current level of £150,000 per year. If you do slot into this bracket you might be in for a pleasant surprise. Flat rate VAT is a lot easier to cope with than the regular scheme and for you as a business owner it could result in a lot less hassle and paperwork.
In terms of the way you invoice your clients and customers for VAT nothing will change. The difference lies in the way you remit your VAT to HMRC. If you are part of the normal VAT scheme you’ll know you have to send a VAT return in every three months. You’ll have to keep proper records if you switch over to the current scheme just as you do now, but you might be surprised at the difference in the amount of VAT you have to part with.
No one likes paying VAT because it has to come out of your profits. Of course it is an essential part of running a successful business. The good thing is the rate you’d pay as a flat rate would be a lot less than you’d pay as part of the traditional VAT scheme. The rate you pay depends on the business you have but it could be less than half the amount you pay now. Even if you only had a 25% discount on the amount you currently pay, you can imagine the difference that could make to your business and the profits you would rake in.
If you are interested in the sound of this, the best thing to do is to read more about the scheme. Once you see how your business would fit into it you’ll be able to work out whether you would be better off under the scheme.
It has been in place for several years now but it seems as if some business people just aren’t aware that it exists. Either that or they have heard about it in passing but haven’t really found out any more about it. However, as you can see, there is a chance you could really take advantage of opting into the scheme. Some people have managed to save a lot of money they would otherwise be sending to HMRC as a VAT payment. If you can make your paperwork easier and far more straightforward you’ll be glad you found out more about the scheme and considered its benefits.