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claretfan
21st August 2011, 10:38
Hi,

New to LTD company trading and have just registered for flat rate VAT.

I declared my business as 'Other Business Services Not Listed Elsewhere' which attracts a flat rate of 12%.

Im worried that I may have miscalssified but couldn't find an appropriate sector in the tax office list. I provide set up and management of PMO offices for Business and IT projects.

Does my classification seem right ?

Thanks

Wanderer
21st August 2011, 23:05
Im worried that I may have miscalssified but couldn't find an appropriate sector in the tax office list. I provide set up and management of PMO offices for Business and IT projects.

Does my classification seem right ?

Welcome! :wave:

I had a look at the list of sectors (http://www.hmrc.gov.uk/vat/start/schemes/flat-rate.htm#5a) and I can't really see one which obviously matches your business.

You could consider Management consultancy 14% (though it doesn't really sound right) or Computer and IT consultancy or data processing 14.5% except it sounds like though you work with computers (who doesn't if you are working in an office) it may not be your primary business.

There is also some guidance here (http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageLibrary_ShowContent&propertyType=document&id=HMCE_CL_000345#P124_11902). What I suggest you do is have a hard think about your choice and document the sectors you considered and the reasons why you have chosen the one you did.

File this document away with your VAT application so you can refer to it at a later date. You will have a much better defence against an inquiry if you can produce written notes from the time of application stating what your reasoning was for choosing a particular FRS rate.

You could also ask your accountant (or the VAT helpline :eek:) for an opinion, take notes of the conversation or get written confirmation of the discussion and file this too.

northernladuk
22nd August 2011, 12:09
You could consider Management consultancy 14% (though it doesn't really sound right) or Computer and IT consultancy or data processing 14.5% except it sounds like though you work with computers (who doesn't if you are working in an office) it may not be your primary business.


It is the 14.5% one in my opinion. Check your contract. Often you are referred to as the consultant in the contract therefore whatever you are doing you are offering IT consultancy to your client.

kaiser78
25th August 2011, 21:21
It is the 14.5% one in my opinion. Check your contract. Often you are referred to as the consultant in the contract therefore whatever you are doing you are offering IT consultancy to your client.

I would disagree and say the 12% would be the recommended category. There is a quite a distinct difference between management consultancy and project management / PMO consultancy in terms of skills, role nature, experiences required etc. And as you work in business project environments as well as IT, as long as you can justify these differences if you needed to you could strongly argue that the 14% or 14.5% categories do not apply in your situation and therefore the 12% is the more suitable.