VAT-flatratescheme

Rather than reclaiming VAT on individual purchases, businesses on the flat rate scheme apply a fixed percentage — set according to their trade sector — to their VAT-inclusive turnover and pay that over to HMRC. This significantly reduces the record-keeping burden of standard VAT accounting.

Whether it actually saves money depends on the sector rate and how much VAT-bearing expenditure the business has, so it doesn't suit everyone equally. We help clients run the comparison against standard accounting before deciding whether to join.