Sole Trader VAT - The Choices
There are two choices of VAT schemes.
Standard VAT Scheme
The Standard VAT Scheme allows you to claim back any VAT you have incurred on expenses.
For instance if you were to buy tools costing £1,200 the first £1,000 of this is the fee paid to the shop for the tools with the additional £200 being the VAT that the shop will then pay to HMRC. We would then be able to claim this £200 back from HMRC for you when we file your VAT return.
Then Standard VAT Scheme is a very good system for businesses that incur a great deal of expenses that carry VAT.
Flat Rate VAT Scheme
The Flat Rate Scheme is great for business that only have expenses which do not have VAT charged on them:
- Travel (not petrol as this has VAT charged on it)
The Flat Rate Scheme works by way of you charging your customers VAT on the work you do at 20% – just like the Standard VAT Scheme – then instead of claiming back the VAT on your expenses, you get to keep a percentage of the VAT you charged your client.
When you join The CMJ Accountancy service we will review your business and offer you advice on which is the best scheme for you to join. We will then register your business for VAT if you are not already registered and prepare and submit your VAT returns each quarter, telling you how much you need to pay and how to make the payment.
For further help, or to enquire about joining our services, please call us on 0845 834 0264 or drop us an email at email@example.com.
This information is for general information only. We take no responsibility for any action taken or refrained from in consequence of its contents. Always seek our professional advice specific to your circumstances before acting.