I'm registering a partnership of two CORGI gas plumbers for VAT and am thinking of applying to go onto the Flat Rate Scheme. Can anyone tell me what the percentage rate is for this sort of business?
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Yes, materials and supplies are more than 50% of the turnover. As far as I can tell, it's looking like the Flat Rate is going to be 9.5% [8.5% in first year].
sorry, deleted my last post as I realised that I already had enough to go on.
1) yes to the flat rate percentage
2) The flat rate scheme becomes applicable normally from the first quarter after being accepted onto it (you will receive notification in writing from HMRC) however, you can request that the scheme becomes applicable at an earlier date that must be no earlier than your last VAT return.
You may not receive acceptance in time if you register now (assuming that backdated acceptance is granted) but you could try (HMRC's aim is a response within 30 days).
However, you would still be able to reclaim your VAT under your existing standard rate VAT registration rather than under the flat rate scheme. (I am assuming that the question relates to moving from standard rate to flat rate).
You need to refer to VAT notice 733 and VIT32000 for specific guidance.
HTH,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
No, it's not going from standard to flat rate; they are registering for VAT for the first time.
I know that the VAT on a van (as a capital item over £2k) can be recovered under the flat rate scheme. I'm just not sure whether it can be recovered as pre-registration VAT under this scheme. Under the standard scheme, it can be used for items up to 4 years before registration, if they're still in the business.
Even if the flat rate scheme does allow recovery of pre-registration capital expenditure, I have been doing some estimates which make me feel that the standard scheme might be better for this business. Their profit margin is actually about 25%.
