Commentary

V7.225 How the flat rate scheme works

Part V7 Tax planning
Part V7 Tax planning | Commentary

V7.225 How the flat rate scheme works

Part V7 Tax planning | Commentary

V7.225 How the flat rate scheme works

The flat rate scheme is simple to operate and works on the following basis:

  1.  

    •     under normal VAT accounting, a business separately records the VAT on its sales as output tax and the VAT on its purchases and expenses as input tax. Its VAT liability for a period equates to output tax less input tax. With the flat rate scheme, there is no need to record sales or purchase invoices in this manner

  2.  

    •     the flat rate scheme only requires a business to record the value of its sales (including VAT) or takings

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