Autumn statement - end of VAT flat rate scheme?

[Sonicboom]

Because there is a large set of 1-10 employee companies in say the care sector created to take advantage of flat rate VAT and Employer NI relief schemes.

And as with all these things its proving very hard to fix the loopholes without hitting others. And surprise, surprise contractors are caught in the crossfire.

https://www.theguardian.com/uk-news/...ds-of-millions

[minstrel]

Sort of, yes...but for those on FRS they don't need to worry about whether each purchase had VAT or not when entering onto their books.

I don't get this new rule though, why make a complicated new rule rather than just achieve pretty much the same result by increasing the FRS % on categories like the management consultancy and IT/data processing one?

Agreed.

And it looks like you can easily bypass the new rule if you buy goods worth > 2% of your turnover.

[TheCyclingProgrammer]

https://www.theguardian.com/uk-news/...ds-of-millions

I have a strong feeling this is the result of the above bollocks.

[TheCyclingProgrammer]

Agreed.

And it looks like you can easily bypass the new rule if you buy goods worth > 2% of your turnover.

But how many of us actually do that?

Spending money on goods we don't need just to bypass this rule makes absolutely no sense.

[VillageContractor]

But how many of us actually do that?

Spending money on goods we don't need just to bypass this rule makes absolutely no sense.

I always need a new shiny toy

[Grasser73]

One advantage to staying on the FRS is the almost zero chance of a VAT inspection since you are paying the 'right' amount by definition.

[minstrel]

But how many of us actually do that?

Spending money on goods we don't need just to bypass this rule makes absolutely no sense.

I'll buy £3k of paper and then sell £3k of paper to you. The cost of this transaction is likely to be less than switching to a 16.5% FRS %.

[Darren at Fox-Bartfield]

I don't get this new rule though, why make a complicated new rule rather than just achieve pretty much the same result by increasing the FRS % on categories like the management consultancy and IT/data processing one?

Agree Chris, but not the first time HMRC have made things overly and unnecessarily complicated without any real need!

[SussexSeagull]

Sort of rule someone brings in looking at a spreadsheet who has never run a business.

[minstrel]

I always need a new shiny toy

Capital Expenditure is disallowed when calculating the 2%, so make sure you have an appropriate accounting policy that ensures your new shiny toy is not Capex