Lentells Limited

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Thursday, 07 July 2022 12:53

Change to flat rate scheme VAT reporting

HMRC has confirmed that reporting requirements under the VAT flat rate scheme are due to change in June 2022.

From 1 June 2022, businesses registered under the flat rate scheme should no longer include imports accounted for under postponed VAT accounting within their flat rate turnover but they will still have to complete a flat rate scheme calculation and record the VAT due on any imports. The value of import VAT should be included in box 1 on VAT returns.

Reporting this correctly will exclude the value of imported goods from the flat rate scheme calculation.

The flat rate scheme is available to businesses with a turnover of no more than £150,000 a year, excluding VAT. There are also additional rules to stop abuse of the scheme.

Businesses will cease to be eligible to use the flat rate scheme if the total value of their income for the year ending is more than £230,000. However, if HMRC is satisfied that the total value of income in the next 12 months will not exceed £191,500, companies may be eligible to remain in the scheme.

If a company is part of a VAT group, or is eligible to join an existing VAT group, then it cannot use the flat rate scheme.

Postponed VAT accounting was introduced on 1 January 2021 and allows UK VAT registered businesses to declare and recover import VAT on the same return, rather than having to pay it upfront when the goods are imported and recover it later.

For more information please go to https://www.gov.uk/government/publications/revenue-and-customs-brief-3-2022-postponed-vat-accounting-and-businesses-registered-under-the-flat-rate-scheme/revenue-and-customs-brief-3-2022-postponed-vat-accounting-and-businesses-registered-under-the-flat-rate-scheme.

Last modified on Tuesday, 04 October 2022 11:56

        

 
 

Chard Office

17-18 Leach Road 
Chard Business Park 
Chard
Somerset 
TA20 1FA

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01460 64441

Seaton Office

Kingsway
50 Fore Street
Seaton
Devon
EX12 2AD

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01297 20584

Taunton Office

Ash House, Cook Way
Bindon Road
Taunton
Somerset
TA2 6BJ

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01823 286274