VAT Flat Rate Scheme Update

[Kugel]

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?

[FlashingTwelve]

Duality of purpose much?

Not if I don't use them personally in any way? I certainly wouldn't do that, at home I use a cheap biro.

If some hypothetical rule was introduced whereby more expenditure on business laptops, or computer software, or staff salaries, would make sense as the additional cost was offset by reliefs, this would be fine. As I understand it hector couldn't claim you should have bought a £1k laptop instead of a £5k laptop. So why not for stationery? Genuine question.

[northernladuk]

In many cases even if it's available for use it's caught. Like a company car sitting on your drive even if you don't use it. It's available... And pens... Really??

[northernladuk]

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?

Depends on what it is. Clothing is also a bare necessity of life. Suits and general office gear don't count.

[FlashingTwelve]

In many cases even if it's available for use it's caught. Like a company car sitting on your drive even if you don't use it. It's available... And pens... Really??

I'm hardly going to scribble my shopping list in my £1k business organiser/diary, but fair point.

[Kugel]

Depends on what it is. Clothing is also a bare necessity of life. Suits and general office gear don't count.

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

[BigRed]

.....leaving the scheme and accounting for VAT under the standard calculation method can produce a relatively insignificant sum of between £78-£128 per annum (based on turnover of between £60k-£90K per annum and reclaiming input VAT on accountancy fees alone). ...This of course will require your additional time for potentially minimal benefit

So they think 5 minutes work to save £78-£128 is a minimal benefit?

[northernladuk]

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

Bit more detail? You selling clothing to your client or just trying to get your undercrackers cheaper?

[TheCyclingProgrammer]

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.

Just suck it up and move onto the standard scheme and recover all of your VAT for a bit more paperwork or stay on the FRS for an easy life at the expense of not recovering your input VAT.

[Maslins]

Seem to be 'advising' us to stay in the FRS but forgot to mention that you should consider other vatable expenses such as mobile phone, insurances, travel, IT equipment etc which for most of us make the benefit of leaving FRS worth a lot more than the 'relatively insignificant sum of between £78-£128 '

Agreed. Our view is that it makes sense for most to leave, but we've left it up to the individual. Some do think the hassle of worrying whether each little business cost they incurred had VAT on it or not outweighs losing what will probably amount to a few hundred pounds a year (so what your accountant is suggesting), but of those who have clearly given it some thought the majority seem to be leaving.