VAT – Have you considered the Flat Rate Scheme?

 

The Flat Rate Scheme is a method of accounting for VAT, which could save you time, smooth cash flow and best of all, could result in more cash in your pocket!

If your taxable turnover for the next 12 months is expected to be less than £150,000 – you qualify.

If you don’t suffer a lot of VAT on purchases, for example if you are a service based business, the scheme is probably for you.

How does it work?

The amount of VAT payable to HMRC is calculated by multiplying your gross turnover by a percentage agreed with HMRC.  An example is detailed below:

Business Type: Travel Agent

Percentage payable: 10.5%

                                                                                                   £

Net Turnover			100,000
VAT Charged (A)			20,000
Gross Received			120,000
VAT payable to HMRC (B)			12,600
Under Flat Rate scheme
Flat Rate “Profit” (A-B)			7,400
This amount is liable to Tax			(1,554)
Assumed 21%
Additional “Cash” in your pocket			£5,846

This example assumes an immaterial level of VAT is suffered on purchases.

Following joining the flat rate scheme and agreeing the percentage payable, you receive a 1% discount in your first year of adopting the scheme.  Don’t worry if you intend to make a capital purchase of over £2,000 (VAT inclusive) as the VAT can be reclaimed as normal on these items.

What to do next?

If you feel your business could benefit from the scheme please call Gareth Perrett on 01902 773933 or email garethp@crom.co.uk to arrange a free no obligation consultation to assess your suitability for the scheme.

Crombies: The Self Assessment Deadline is Looming

Crombies: The Self Assessment Deadline is Looming: The deadline for filing on paper for the tax year which ended April 5 2011, passed on October 31 last year. However, you can still file onl...

The Self Assessment Deadline is Looming

The deadline for filing on paper for the tax year which ended April 5 2011, passed on October 31 last year.
However, you can still file online up until midnight on Tuesday 31st Junaury 2012; any tax due must also be paid by this date.

Meeting the deadline is more important than ever because HM Revenue & Customs has introduced tough new penalties for late-filed tax returns.
There is now a £100 fixed penalty for submitting your tax return late, even if you have no additional tax to pay; previously, the fine was £100, capped at the amount of tax unpaid as at January 31st.

If the return is more than three months late, there is a £10 daily charge, capped at £900 or 90 days, and after six months, a further penalty of £300, or 5 per cent of the tax at stake is applied.

To avoid getting caught out by this deadline or to obtain any advice on how to file your tax return, please contact us at Crombies Accountants on 01902773993.

Children In Need Update

We thought we would share that Alex's certificate for the fundraising he did for children in need back in November was delivered a few days ago. Once again we would like to portray how proud we were of his brave antics, and can't wait to see what he does this year!!

New Member of Staff

We would proudly like to welcome Alec Walton to the practice. Alec has been with us for the last 2 months and has bedded in well with our clients and staff. Alec is situated on John Young's team as an audit and accounts assistant.  He is currently studying towards his AAT qualification as a junior. In his own time he enjoys watching Sports, follows Wolverhampton Wanderers but mainly Leicester Tiger’s rugby club. We hope his future with us will be a long & successful one.