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Profits fly higher with Flat Rate VAT Scheme

The Flat Rate VAT Scheme was introduced to make the process of completing VAT Returns simpler for small businesses.

A small business is defined as one with a turnover BELOW £150, 000.

Any business below that threshold may register. It is not necessary for income to be above the compulsory vat registration threshold, which for the year to 31st March 2015 is £81,000.

A fixed rate of total income is paid over to HMRC. The rate is dependent upon your trade or profession. For Entertainers that rate is 12.5%. For the first year it will be 11.5%, as a 1% discount applies.

If you trade with businesses that are already registered for vat, as most production companies are, the Flat Rate Scheme could make you considerable extra income!

Here is an example based on income of £30,000:

VAT of £6000 will be invoiced on top of the fee income of £30,000.

11.5% of £36000 is paid over to HMRC. This amounts to £4140.

The balance of £1860 is extra profit for you.

As your income increases, so does the extra profit.

You can also recover vat on any individual equipment purchases that exceed £2000 inclusive of vat. This would enable you to claim back the vat on an all singing and dancing imac!

After the first year on the scheme you can stay on it provided your total income, inclusive of vat, is below £230000.

VAT registration may be backdated

Let me know if you feel a VAT Registration would suit you, and I will check whether we can make your profits fly higher with Flat Rate VAT Scheme!