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If you business uses the flat rate VAT scheme, then don’t forget that the relevant percentage you use will change on the 1st January 2010 when the VAT rate reverts back to 17.5% from 15%.
HM Revenue and Customs (HMRC) have said the new rates will be published before the of this year, to give users plenty of notice before the change takes effect. HMRC will be taking the opportunity to adjust some of the percentages for the categories where they feel the scheme does not give a fair result, so you may find the percentage applicable to your business may not be the same as it was when the 17.5% VAT scheme was previously applied.
If your VAT quarter overlaps the VAT rate change, i.e. your VAT quarter ends on the 31st January 2010, then you will need to make two flat rate scheme calculations for that quarter. For example, apply the current percentage for sales made up to 31st December 2009 and apply the new percentage on sales made from the 1st January 2010 onwards.
If you need help with your calculations, please speak to use or your accountant.
Source: HMRC and Keens Shay Keens MK
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