Just announced that they’re going shut down inappropriate use of the flat VAT scheme. Oh deary me that’ll upset a few folk on here. 
Why ?
I’ll be ok I live in a house.
Conor, I hate to be pedantic but the title would’ve been clearer if it read
Autumn Budget: Abuse of Flat rate Vat Scheme to come to an end.
Edit: link gov.uk/government/publicati … nical-note
HM Revenue & Customs
Tackling aggressive abuse of the VAT Flat Rate Scheme - technical notePublished 23 November 2016
At Autumn Statement on 23 November 2016, the Chancellor of the Exchequer announced the introduction of a new 16.5% VAT flat rate for businesses with limited costs. This will take effect from 1 April 2017. This note provides further details on those affected by the new rate.
Background
The VAT Flat Rate Scheme (FRS) is a simplified accounting scheme for small businesses. Currently businesses determine which flat rate percentage to use by reference to their trade sector. From 1 April 2017, FRS businesses must also determine whether they meet the definition of a limited cost trader, which will be included in new legislation.Businesses using the scheme, or thinking of joining the scheme, will need to decide whether they are a limited cost trader. For some businesses - for example, those who purchase no goods, or who make significant purchases of goods - this will be obvious. Other businesses will need to complete a simple test, using information they already hold, to work out whether they should use the new 16.5% rate.
Businesses using the FRS will be expected to ensure that, for each accounting period, they use the appropriate flat rate percentage.
What is a limited cost trader?
A limited cost trader will be defined as one whose VAT inclusive expenditure on goods is either:less than 2% of their VAT inclusive turnover in a prescribed accounting period
greater than 2% of their VAT inclusive turnover but less than £1000 per annum if the prescribed accounting period is one year (if it is not one year, the figure is the relevant proportion of £1000)
Goods, for the purposes of this measure, must be used exclusively for the purpose of the business but exclude the following items:capital expenditure
food or drink for consumption by the flat rate business or its employees
vehicles, vehicle parts and fuel (except where the business is one that carries out transport services - for example a taxi business - and uses its own or a leased vehicle to carry out those services)
These exclusions are part of the test to prevent traders buying either low value everyday items or one off purchases in order to inflate their costs beyond 2%.Anti-forestalling provisions
Paying or invoicing in advance to avoid an increase in tax is known as forestalling. Anti-forestalling legislation was published on 23 November 2016 and should be read alongside this guidance. This can be found in sections 8.2 and 9.7 of VAT Notice 733: Flat rate scheme for small businesses. It is designed to prevent any business defined as a limited cost trader from continuing to use a lower flat rate beyond 1 April 2017.This will affect a business that supplies a service on or after 1 April 2017 but either issues an invoice or receives a payment for that supply before 1 April 2017.
When considering the limited cost trader definition, any such supply must be treated, for VAT purposes, as taking place on 1 April 2017. Any invoice or payment that covers continuous supplies of services that cross this date must be apportioned.
What happens next?
Draft secondary legislation will be published on 5 December 2016 and businesses will have 8 weeks to comment. To support businesses, we will introduce an easy-to-use online tool that will help determine whether they should use the new rate.We will communicate with affected businesses regularly between now and 1 April 17.
In the interim, if you have any queries, please contact our VAT Helpline on Telephone: 03000 200 3700. Opening hours are Monday to Friday, 8am to 6pm.
To summarise it means:
Another year, another crackdown on tax avoidance. The measure is a good one though. It is specifically aimed at closing down the scheme where employment agencies make windfalls by exploiting the flat rate scheme.
FRS VAT introduced 2002
Inland Revenue became HMRC 2005
The 2 named organisations AUTHORISED all of the FRS VAT applications, not some dodgy backstreet outfit.
All applications must have met the relevant legislation and operated inside of the relevant VAT rules and regulations
From the date FRS began, it has taken HMRC 14 years to learn that people were actually making easy money out of it. I would guess that anybody who receives money for nothing legally, would grab it while they could.
Those namby pambies that are sniggering to themselves should realise the amount of easy money over the years that they have missed out on, new car, holiday, money in the bank Frank.
Well done HMRC for taking 14 years to realise what is as obvious as the nose on ones face.
This is further proof of HMRC not being fit for purpose 
Nothing in the Autumn budget of course about multi-millionaire landowner Iain Duncan Smith and the hundreds of thousands of pounds he receives every year in eu farm subsidies. I guess abuse is fine, if you mix with the right crowd. 
A bit like those multi millionaires on TV last Friday night asking the poor people to donate money for charidee 
robbo99.:
Those namby pambies that are sniggering to themselves should realise the amount of easy money over the years that they have missed out on, new car, holiday, money in the bank Frank.
At least I don’t have to look over my shoulder or worry whether I’ll get a tax demand for £15,000 like one person already has on here and then as well as worrying about that be bricking myself over whether tax credits will come back to me for all the money they’ve paid me which I wasn’t entitled to.
Conor:
robbo99.:
Those namby pambies that are sniggering to themselves should realise the amount of easy money over the years that they have missed out on, new car, holiday, money in the bank Frank.At least I don’t have to look over my shoulder or worry whether I’ll get a tax demand for £15,000 like one person already has on here and then as well as worrying about that be bricking myself over whether tax credits will come back to me for all the money they’ve paid me which I wasn’t entitled to.
This thread relates to the scrapping of the FRS VAT by the Government.
What on earth has some individual who has been landed with a large NI/Income Tax bill for falling foul of the MSC legislation got to do with the FRS?
As usual, the chancellor of the moment does underwhelming “good” stuff, and cracks down on ordinary people rather than gets the rich to pay more.
“Cracking down on tax evasion” is easy to say - but bloody hard to do without fresh legislation to chase the money offshore, and actually take passports off people who are under investigation - like “Sir” Phillip Green for instance. It’s high time we added “Sir” Richard Branson to that list as well, if it’s true he’s mis-spending money on trying to turn over a democratic result as stated in the press. 
Conor:
At least I don’t have to look over my shoulder or worry whether I’ll get a tax demand for £15,000 like one person already has on here and then as well as worrying about that be bricking myself over whether tax credits will come back to me for all the money they’ve paid me which I wasn’t entitled to.
It was me with the 15 grand bill Conor. I didn’t lose any sleep over it then and I’m still not losing sleep over it now. A few lads where I worked paid bills of between 10 and 20k and a few like me elected not to. I live in a rented house (in my girlfriends name) what are they gonna do?
That’s all irrespective now though as HMRC have written and informed me that it is now their opinion that I acted in good faith in employing a "professional " accountant (Think) and it is not my fault that they turned out to be crooked, consequently my personal position is now that my bill has been waived in favour of HMRC pursuing the directors of Think. Thank God I didn’t pay or it would have been money lost.
Thats good to hear “the maoster”, all along this legislation has just been one big fishing exercise to cast HMRCs net and try and get whoever they can to pay up, Its a pity when HMRC know exactly what the likes of Think and their other Mickey Mouse outfits are upto but fail to stop them. Seems HMRC arent interested in helping to prevent wrong doing.