Commentary

V2.199C Flat rate scheme for small businesses—applicable rate

Part V2 Registration – deregistration

V2.199C Flat rate scheme for small businesses—applicable rate

V2.199C Flat rate scheme for small businesses—applicable rate

Determining the appropriate flat rate percentage

The flat rate percentage which a flat-rate trader is required to apply to his turnover is determined as follows1:

  1.  

    •     where a prescribed accounting period begins with a relevant date, the rate specified in the appropriate table below for the category of business which he is reasonably expected to carry on at that date

  2.  

    •     where a prescribed accounting period contains the trader's start date but does not begin with that date, the rate specified in the appropriate table below for the category of business which he is reasonably expected to carry on at that date for the remainder of that period

  3.  

    •     in other cases, the rate applicable to the previous prescribed accounting period

However, where a relevant date which is not the trader's start date occurs other than on the first day of a prescribed accounting period, the rate to be applied is that specified in the appropriate table below for the category of business which he is reasonably expected to carry on for the remainder of the period. Where a further relevant date occurs, the rate changes accordingly2.

Example 1

Arthur, a printer, is authorised to use the scheme with effect from 1 July 2019. This is also the start of his prescribed accounting period and is a relevant date (being his start date). He applies the appropriate flat rate of 8.5% from 1 July 2019.

Example 2

On 1 February 2019 the table of rates is amended

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