VAT Flat Rate Scheme - which rate should I be on?

[kungfuman]

Hi,
I’m new to contracting and just recently started up my company, I’m in the process of registering for the VAT flat rate scheme but I’m unsure of which rate I should be registering for. I’m a Mechanical Engineer contracting to the Oil & Gas industry. My accountant (who also deals with other contractors) is not doing my VAT returns as I was told it was easy enough to do yourself but he has advised me that I should be classed as ‘Other Business activities – 10.5%’. But some of the other contractors I know say it should actually be ‘Architecture, civil and structural engineering – 12.5%’. Would like to know if anyway here knows what the right one is as I don’t want to be caught out over paying/underpaying vat.

[Fred Bloggs]

Yes, 12.5% would correct. I am a process engineer in the O&G industries. What the consequences of being in a (possibly incorrect) lower band might be long term, I do not know. HTH.

[BolshieBastard]

Unless changed in the budget, new company start ups also get a 1% discount for 12 months. So, if your FRS percentage is 12.5%, for the first 12 months its actually 11.5%

[Fred Bloggs]

Unless changed in the budget, new company start ups also get a 1% discount for 12 months. So, if your FRS percentage is 12.5%, for the first 12 months its actually 11.5%

Correct, forgot to say that!

[kaiser78]

Hi,
I’m new to contracting and just recently started up my company, I’m in the process of registering for the VAT flat rate scheme but I’m unsure of which rate I should be registering for. I’m a Mechanical Engineer contracting to the Oil & Gas industry. My accountant (who also deals with other contractors) is not doing my VAT returns as I was told it was easy enough to do yourself but he has advised me that I should be classed as ‘Other Business activities – 10.5%’. But some of the other contractors I know say it should actually be ‘Architecture, civil and structural engineering – 12.5%’. Would like to know if anyway here knows what the right one is as I don’t want to be caught out over paying/underpaying vat.

If your accountant suggests the ‘Other Business activities – 10.5%’ and you could argue that you do not fit directly into the 12.5% band if ever needed to, then go with this. Needless to say the lower band you can get away with the better. And as per other postings don't forget the 1st year 1% discount.

[AndyK]

Note, when VAT returned to 17.5% in January flat rate percentage for "Architect, civil and structural engineer or surveyor" went up from 11% to 13% rather than returning to 12.5% as it was before the VAT reduction. Make sure you're using the rright percentage

[Fred Bloggs]

Note, when VAT returned to 17.5% in January flat rate percentage for "Architect, civil and structural engineer or surveyor" went up from 11% to 13% rather than returning to 12.5% as it was before the VAT reduction. Make sure you're using the rright percentage

Correct, my useless dipstick of a "chartered accountant" got my VAT return wrong this month in exactly this way.