HMRC’s recent report suggests the Flat Rate Scheme may no longer offer significant tax or time-saving benefits, especially since the introduction of Making Tax Digital and the 2017 ‘limited cost trader’ rules.

Available to businesses with a turnover of £150,000 (ex. VAT) or less, the Flat Rate Scheme allows you to pay a fixed rate of VAT based on your trade sector. However, you can’t usually reclaim VAT on purchases, and savings are now minimal for many.

With HMRC potentially revising or scrapping the scheme, now is a good time to check if it works for your business.

If you have any questions, or would like to know more, please contact a member of our VAT team on 01227 277667 or VAT@mphaccountants.co.uk