VAT Flat Rate Scheme turnover limit.

[TLTD]

I've been in the VAT Flat Rate Scheme for 7 years. I'm in the fortunate situation where my VATable annual turnover has exceeded £150k and my accountant has advised me that if this continues then I will have to leave the FRS and complete a full VAT return. He's wrong isn't he ? If I read the HMRC rules correctly then you cannot join the scheme if your turnover is above £150k but once you are in you can stay in until your turnover exceeds £230k. Can anyone confirm my understanding ?
TIA

[Clare@InTouch]

You're correct - you cannot join if you're over £150,000 and you must leave if your gross turnover exceeds £230,000.

Have a read through here: HM Revenue & Customs: Flat Rate Scheme for VAT

You can join the Flat Rate Scheme for VAT and so pay VAT as a flat rate percentage of your turnover if:

Your estimated VAT taxable turnover - excluding VAT - in the next year will be £150,000 or less. Your VAT taxable turnover is the total of everything that you sell during the year that is liable for VAT. It includes standard, reduced rate or zero rate sales or other supplies. It excludes the actual VAT that you charge, VAT exempt sales and sales of any capital assets.

Generally you don't reclaim any of the VAT that you pay on purchases, although you may be able to claim back the VAT on capital assets worth more than £2,000 - see the section in this guide on claiming back VAT on capital assets for the rules and restrictions.

Once you join the scheme you can stay in it until your total business income is more than £230,000.

[TLTD]

You're correct - you cannot join if you're over £150,000 and you must leave if your gross turnover exceeds £230,000.

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Once you join the scheme you can stay in it until your total business income is more than £230,000.

Looks like I might be needing a new accountant !

Thanks

[SueEllen]

Looks like I might be needing a new accountant !

Thanks

I think you may have found a good one.