Autumn statement - end of VAT flat rate scheme?

[missinggreenfields]

Someone, somewhere is going to have a paper surplus.

When the circle is complete, the original purchaser returns the paper to the vendor under the distance selling regulations.

Simple

[minstrel]

A new SurfaceBook every year maybe ?

That's normally Capital Expenditure which doesn't count, but you could create an accounting policy to only capitalize items over a certain threshold if your accountant agrees.

[TheCyclingProgrammer]

When the circle is complete, the original purchaser returns the paper to the vendor under the distance selling regulations.

Simple

Ah, but the distance selling regs are part of consumer contract law and do not apply to business sales.

[minstrel]

Ah, but the distance selling regs are part of consumer contract law and do not apply to business sales.

I'll get my wife to buy it as a consumer and then get her to sell it to my Ltd

[m0n1k3r]

Yes, effectively the flat rate scheme has been abolished, in the sense that it would make no sense to continue to use it. You'd save more going on the normal VAT regime, you can then reclaim VAT on expenses.

However expect your contractor accountant costs to go up (assuming they do bookkeeping and VAT returns for you).

[Alan @ BroomeAffinity]

However expect your contractor accountant costs to go up (assuming they do bookkeeping and VAT returns for you).

Not sure about that tbh. There's not a lot more to do if the contractor uses something like freeagent. Expect a bigger drive to get contractors into cloud accounting.

[dmini]

What about training?

Does training count as purchase of goods? Just a thought (having just done some).

[djf]

Most contractors will lose money if they use the VAT FRS from April

£100000 income + 20%VAT = £100000 + £20000 = £120000
£120000 * 16.5% = £19800 to pay to HMRC

Which means that you have to pay £19800 out of the £20000 to HMRC leaving you with £200 and no ability to claim any VAT back on anything (including accountancy fees).

Now my accountant charges me £90 + VAT per month which works out at £216 VAT annually which is obviously not covered by the £200

If you are not on the FRS scheme you would have to pay £20000 - £216 = £19784 which is a saving of £16. I know it is not a lot but it is worse the lower you are under £100K

If your are comfortably under the VAT deregistration threshold it might be worth deregistering completely.

[SueEllen]

Does training count as purchase of goods? Just a thought (having just done some).

It's a service. It isn't a tangible object.

Oh and looking at the VAT list earlier it means that people like hairdressers and beauticians will be screwed.

[Alan @ BroomeAffinity]

The problem, as with many things HMRC,is that the FRS was ill-conceived in the first place, and ambiguous and therefore subject to abuse. If it was done properly in the first place, the rates would be nearer the amounts you'd pay in the standard method. The frs was designed to simplify the admin around VAT. The gain we all made on it was simply a by-product.