Hi All,
I'm currently contracting as an IT professional and am looking at voluntarily applying for the VAT flat rate scheme.
I would be paying a flat rate of 14.5% based on the work I'm doing.
I understand that I would not be able to claim back any VAT on purchases, but should make some money back through the difference of my flat rate vs 20% I'm receiving with my invoices.
My question is, is it worth me even applying for VAT? Am I missing something here that I will later regret? I spoke to my accountant friend who said never apply for VAT if you don't have to. He said you always end up paying more tax but I can't figure out how/why.
I know there's more paperwork involved but that doesn't worry me.
What do you guys think?
I'm currently contracting as an IT professional and am looking at voluntarily applying for the VAT flat rate scheme.
I would be paying a flat rate of 14.5% based on the work I'm doing.
I understand that I would not be able to claim back any VAT on purchases, but should make some money back through the difference of my flat rate vs 20% I'm receiving with my invoices.
My question is, is it worth me even applying for VAT? Am I missing something here that I will later regret? I spoke to my accountant friend who said never apply for VAT if you don't have to. He said you always end up paying more tax but I can't figure out how/why.
I know there's more paperwork involved but that doesn't worry me.
What do you guys think?
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