I have received a leaflet from the VATman that says the flat rate VAT scheme would save me a lot of time and hassle, is this true?
Under the flat rate VAT scheme, you simply multiply your gross sales (including VAT) by a percentage ranging from 2% to 13.5%, depending on your trade sector, to calculate the VAT you owe the VATman. This may be quicker than adding up all the VAT paid on your purchases and deducting that figure from the VAT charged on your sales, but it could cost you money. If you are in a sector with a high flat rate percentage, or you have a high ratio of purchases to sales, you may end up paying more VAT to the VATman under the flat rate scheme. However, in other cases, you can pay less VAT. Ask us to help you with the calculations.