Commentary

V7.224 Flat rate scheme—introduction

Part V7 Tax planning
Part V7 Tax planning | Commentary

V7.224 Flat rate scheme—introduction

Part V7 Tax planning | Commentary

Flat rate scheme ('FRS')

V7.224 Flat rate scheme—introduction

The flat rate scheme was introduced in April 2002, with the aim of simplifying the record-keeping requirements of a small business in relation to VAT.

The basic principles of the flat rate scheme are as follows:

  1.  

    •     It is only available to a small business where VAT exclusive annual taxable turnover in the next 12 months is expected to be less than £150,000.

  2.  

    •     A business still charges VAT on its sales invoices in the normal way, ie adding 20% VAT for standard rated sales, 5% for reduced rate sales and

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