Commentary

V16.888 Changes to the VAT Flat Rate Scheme (FRS)

Part V16 Forms and other HMRC material

V16.888 Changes to the VAT Flat Rate Scheme (FRS)

V16.888 Changes to the VAT Flat Rate Scheme (FRS)

Information Sheet 17/03, December 2003

This Information Sheet explains changes to the VAT Flat Rate Scheme (FRS)

1 Changes to the VAT Flat Rate Scheme (FRS)

1.1 What's this information sheet about?

In his Pre-Budget Report the Chancellor of The Exchequer announced, changes to the FRS to make it more attractive to business. This information sheet explains those changes.

1.2 What are the changes to the FRS?

The changes are—

  1.  

    —     Lower rates for all sectors, with an average reduction of about 1 per cent. This reflects experience of the scheme to date.

  2.  

    —     A further reduction of 1 per cent off the normal flat rates for businesses in their first year of VAT registration. This recognises the special circumstances of newly VAT-registered businesses and will encourage them to use FRS from the beginning of their VAT registration.

  3.  

    —     An online ready reckoner so that you can check the benefits for yourself. FRS will not suit everyone, but the ready reckoner at www.hmce.gov.uk will help you to decide whether FRS might help your business.

  4.  

    —     Easier methods of application. You will be able to apply by email or by phone. For details see section 5 below.

  5.  

    —     A revised table of flat rate sectors. Together with additional support from our National Advice Service, this will make it easier for you to identify the flat rate that applies to your business. The new table is in Annex A.

1.3 When do the changes take effect?

The new rates, revised sectors

To continue reading
View the latest version of this document, as well as thousands of others like it, sign in to TolleyLibrary or register for a free trial