Flat rate scheme

[humble_pie]

Hi Guys,


I have been registered as Vat business for last 2.5 years. And every quarter my vat re-claimed is next to nothing as compared to what I pay to HMRC.

up until now, I foolishly didn't know about existence if FRS.


So I have few questions

Am I eligible to apply, am well below threshold of £150K.
Can I reclaim my FRS for the returns already submitted to HMRC for last 2.5 years ?

[les35]

You can aply for the FRS ay any time, but you cannot make a back dated application.

[humble_pie]

You can aply for the FRS ay any time, but you cannot make a back dated application.

what is FRS rate? Considering my monthly reclaim is less than 2% of vat paid to Hmrc.

[les35]

Looks like you will be a 'Limited Cost Trader.' See para 4.4 of Notice 733 - https://www.gov.uk/government/publicati ... es#para4-4
You may find you would do better using conventional VAT accounting.

[humble_pie]

Looks like you will be a 'Limited Cost Trader.' See para 4.4 of Notice 733 - https://www.gov.uk/government/publicati ... es#para4-4
You may find you would do better using conventional VAT accounting.

Thank you Les35. Yes, it’s better using conventional accounting. Because the way I understood. With flat rate means. Let’s say I provided services for £100 and £20
Was vat. Total is £120. According to flat rate 16.5*120.
Instead of 16.5*100 which I thought it was.