VAT Flat Rate Scheme Update

[FlashingTwelve]

I'm not convinced that employee BIKs would count as goods used for the purposes of trade.

Yet again people trying to come up with contrived ways to stay on the FRS and then you wonder why the government is constantly targeting us.

By your handle it sounds like you could furnish your business with a lovely library of programming books for next to zip. Are you seriously not considering doing so, at least in the first year?

One of the logic/moral tests I use is to inverse the timeline. Imagine a world where everyone had a 16.5% VAT rate. Along comes an entrepreneur friendly chancellor who announces she is going to reduce this to 14.5% if your business invests in enough allowable goods, like books and physical software. No issue there.

[TheCyclingProgrammer]

I don't see the point in spending money on stuff I don't need just to try and keep myself on the FRS. How long am I going to keep it up?

My first year discount ended many many years ago.

Being on the standard scheme is only as much hassle as you want it to be. You don't have to keep every little receipt and claim the input VAT if you don't want to. You could forgo reclaiming VAT on small cost items like subsistence (where it would be a hassle to get VAT receipts all the time) and just reclaim VAT on the higher cost items or things where you have been given a VAT invoice anyway.

[northernladuk]

By your handle it sounds like you could furnish your business with a lovely library of programming books for next to zip. Are you seriously not considering doing so, at least in the first year?

One of the logic/moral tests I use is to inverse the timeline. Imagine a world where everyone had a 16.5% VAT rate. Along comes an entrepreneur friendly chancellor who announces she is going to reduce this to 14.5% if your business invests in enough allowable goods, like books and physical software. No issue there.

Don't forget when driving to your clients to hit the apex's and take the most efficient route through corners to maximise the profit between your claim and your actual mileage done. Going straight over mini roundabouts rather than going around can make a big difference to your income...

[SueEllen]

Why do you think they do not count? I do not see them on exclusions list.

Because a barrister tested it in court before and the judge simply said "No" due to the reason NLUK stated.

You can Google the case.

[FlashingTwelve]

Each to their own, but I'm viewing the change as an incentive to buy supplies (with significant tax relief) that will further my business's opportunity for success.

£100,000 revenue before vat? FRS benefit was £2,600. You can either reduce the benefit to £200 if you stay on the scheme as a limited cost trader, or exit the scheme and reclaim around £500 VAT. Or, you can take actions like buying £2,600 worth of technical books and physical software for reference/improvement at the cost of forgoing that £200-500 benefit. Deal! A side benefit is looking even less like I might be inside IR35.

[TheCyclingProgrammer]

WTF has this got to do with IR35?

[northernladuk]

WTF has this got to do with IR35?

Employees don't own Mont Blanc pens ergo he must be a business and outside IR35.. Obvious innit.. thicko!!

[MrMarkyMark]

Don't forget when driving to your clients to hit the apex's and take the most efficient route through corners to maximise the profit between your claim and your actual mileage done. Going straight over mini roundabouts rather than going around can make a big difference to your income...

Including the bus lane, right?

[DaveB]

Including the bus lane, right?

Only if you can reclaim VAT on the fixed penalty :P

[BackupBoy]

I am thinking to buy clothing to keep myself on FRS. It will be taxed as BIK, but still looks like a really good value. Clothing is goods, right?

Only when classed as Personal Protective Equipment.