Changes to the VAT flat rate scheme for limited cost traders

From 1 April 2017 a new VAT flat rate of 16.5% is to be introduced for limited cost traders.  It will replace all the existing rates in any case where the value of VAT-inclusive spend on purchase of goods by a business is either less than 2% of your VAT-inclusive turnover (or, if more than 2% of turnover, less than £250 per quarter (£1,000 a year)).  For this purpose “goods” means goods which are used exclusively for the business.

This means that for many businesses currently using a flat rate scheme the new rate must be applied from 1 April 2017 regardless of the company’s trade.

You can read more on this by reading or downloading our article on the subject by following this link.

If you require help you can email steve.booker@haleandco.co.uk or by contacting a member of our outsourcing team.