Flat Rate Scheme %

[anthonytaylor]

Hi,

We will be forced to register for VAT (or ring fence our turnover) towards the end of this year so I am doing my research to find out how it will affect my bottom line now.

We buy primarily from non-VAT registered sellers in cash which means either the Flat Rate or Margin scheme would be preferential for us.

I've ruled out the Margin scheme as it looks like a fair bit of extra work compared with the Flat Rate which looks very straightforward, especially for a VAT newbie.

I'm struggling to pick an appropriate category for the business though - we mainly buy and sell video games (eBay, Amazon) so i'd say that;

'Retailing that is not listed elsewhere' applies to us more than any other category.

I phoned the VAT helpline and they said they couldn't give any specific advice until I actually applied. Given that I am doing a feasibility analysis now, this isn't much help.

Does anyone have any advice / guidance on what category we may be placed in?

Anthony

 

[MrsF]

Will you be applying for Vat online services? To choose your category for example when I registered our tearooms the first option was for something like "Food, Beverages retailer" after clicking that a second option was offered where we could clarify still further what we are about eg Licensed restaurant ( which was the nearest description)

 

[anthonytaylor]

Hi MrsF,

Thanks for the reply. Haven't got round to thinking about how we will be applying yet, but yes I expect we will be using VAT online services.

Would be interesting to do a dummy application to see the full list of categories available, but I am guessing that would be frowned upon :redface:

Anthony

 

[elaine@cheapaccounting]

The list of categories is available on the HMRC web site.

Can I ask what you mean by ring fencing your turnover?

 

[David Griffiths]

Hi MrsF,

Thanks for the reply. Haven't got round to thinking about how we will be applying yet, but yes I expect we will be using VAT online services.

Would be interesting to do a dummy application to see the full list of categories available, but I am guessing that would be frowned upon :redface:

Anthony

You can save your application, unsubmitted, at any time and go back to it later. But the flat rates are on the HMRC website here

 

[anthonytaylor]

I have reviewed the categories but I didn't feel they were particularly descriptive or useful.

The two which I thought were most relevant were;

'Retailing that is not listed elsewhere'
'Any other activity not listed elsewhere'

Online retail would be most accurate.

When I said 'ring fenced' I really meant 'restrict'

 

[elaine@cheapaccounting]

if what you sell is not listed then it would be retailing not listed elsewhere

Read this on what I think of vat ...

Vat - the tax that sorts out the self employed from the business owners?


http://www.cheapaccounting.co.uk/blog/?p=1091


Where do you want your business to go?

 

[anthonytaylor]

Where do you want your business to go?

I want to be turning over at least £200,000 in 12 months (currently at around £10,000 per month but this time will be higher!)

However, my current net margin is quite low so I need to understand of the impact VAT has on my business, and plan for it accordingly.

The only reason I would ever want to restrict my turnover is if I ran my business part-time at £70,000 alongside a full time job, which i've done in the past.

Ant

 

[elaine@cheapaccounting]

So at £10k a month sounds like you should have registered anyway perhaps.

Remember it is £73k of turnover in the last rolling 12 months NOT your last financial year.

 

[anthonytaylor]

We have only done £10,000 for the last month so we do not need to immediately register. I expect it will be August when we do.

That said, I wasn't aware that it was evaluated on a rolling, rather than a yearly basis so that brings the timetable forward a little!

 

[MyAccountantOnline]

We have only done £10,000 for the last month so we do not need to immediately register. I expect it will be August when we do.

That said, I wasn't aware that it was evaluated on a rolling, rather than a yearly basis so that brings the timetable forward a little!

For information on when you have to register for VAT this may help - http://www.hmrc.gov.uk/vat/start/register/when-to-register.htm