Originally posted by northernladuk
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Yes, 16.5% sounds more appropriate from the information I have gathered so far.
The GOV.UK tool ( Enter your VAT return details ) gives me 16.5% too. I enter 120,000 as "turnover for the year including VAT" and I enter £0 as "cost of goods for the year including VAT" (as I cannot enter travel expenses). And this is what I get:
Use the 16.5% VAT flat rate. Based on your answers, you are a limited cost business. This is because the cost of your goods for this year was under £1,000.
I see what you are saying regarding bad advice. I wouldn't just go with the first piece of post somebody puts in here. I am planning to check this with few other contractors, I might check with another accountant too. But at the end of the day, I need to understand this and be clear about the rules and how it all works myself. I thought that this is the whole point of the Accounting/Legal section on this forum - so people can ask questions, get some opinions and then make up their mind.
I wonder if anyone here, in plain English, can explain the pros and cons of different VAT schemes based on this scenario:
- company founded/contract started in December 2018, so far no VAT registration
- steady income with ~£9,000 invoiced every month (£450/day)
- expenses: train (~£550/month) and car mileage (~£180/month).
- £85,000 threshold will be hit around October 2019
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