Is it true that fixed rate VAT scheme is ending in April 2015?
I don’t know the answer to the question, but I’d be interested to know if anybody uses the flat rate VAT scheme. When I asked my accountant about it, he said that although it worked for some types of business, it would be totally unsuited to me since I wouldn’t be able to re-claim VAT paid out.
hope not…
There is nothing on the HMRC website about the scheme closing. It is only really suitable for businesses which don’t have large VATable costs. It could work well for a driver operating a 1 man agency for example, but not for a owner driver with all the costs of running a truck. To be eligible, your expected taxable turnover must not exceed £150,000
Harry Monk:
I don’t know the answer to the question, but I’d be interested to know if anybody uses the flat rate VAT scheme. When I asked my accountant about it, he said that although it worked for some types of business, it would be totally unsuited to me since I wouldn’t be able to re-claim VAT paid out.
You claim back VAT paid out by not paying tax on expences, which VAT is part of. I don’t know what your accountant is on about. He is correct, that you won’t be able to claim VAT on bills paid, but as I said you do claim it back the other way. If you are registered on flat rate VAT you charge 20%, pay HMRC 11% and keep 9%. It’s a win win scenario for drivers contracting, perhaps it’s not suitable to owner drivers, I drive other company’s wagons.
romik:
Harry Monk:
I don’t know the answer to the question, but I’d be interested to know if anybody uses the flat rate VAT scheme. When I asked my accountant about it, he said that although it worked for some types of business, it would be totally unsuited to me since I wouldn’t be able to re-claim VAT paid out.You claim back VAT paid out by not paying tax on expences, which VAT is part of. I don’t know what your accountant is on about. He is correct, that you won’t be able to claim VAT on bills paid, but as I said you do claim it back the other way. If you are registered on flat rate VAT you charge 20%, pay HMRC 11% and keep 9%. It’s a win win scenario for drivers contracting, perhaps it’s not suitable to owner drivers, I drive other company’s wagons.
Harry’s accountant knows exactly what he is talking about as Harry operates his own truck.What you have said makes no sense.
It is definitely a win win for self employed drivers as they have negligible vat’able expenses in relation to turnover, which is exactly what whelmic said.
I just noticed I posted this in wrong forum, as I am not owner driver.