29th November 2016 Posted by - Alexander Accountancy
FLAT RATE VAT Increased by 37.5%
This was one of the measures buried in the detail of the new chancellor’s Autumn Statement that will affect many smaller businesses.
For businesses with low “goods” cost excluding assets and services, or fall below the minimum limit of £1,000, the rate will increase from the one they currently use, say 12% of the gross for consultants, to 16.5% of the gross, an increase of 37.5%.
If you need help working out what should and should not be included in calculating if you are captured by these changes or not Alexander Accountancy can help with those calculations.
It will have a particularly nasty impact for businesses that are mainly consultancy and services based, and using flat rate schemes to minimize their administration.
Any business that are using flat rate schemes need to review if these will still be the best solution in the future. And the best time to evaluate this will be when they complete their next VAT Return.
If any help or advice is required Alexander Accountancy has reacted quickly in assessing the impact this will have and are well placed to help and provide the advice that is needed.
What businesses should not do is wait until the new rate is introduced. Any businesses that will be better off leaving the flat rate scheme need to do so before 1st April 2017.
If you have any questions please email email@example.com or telephone Burton on Trent 01283 743851