Accountants and Bookkeepers in Malvern - Turl & Co

Flat Rate Scheme VAT Advice Changed


The Revenue has updated the guidance on registering for the Flat Rate VAT Scheme.  Previously those who carried out consulting services were advised to register as Management Consultants with a flat rate charge of 14.5%.  This has now been clarified so that businesses that do not describe themselves as offering consultancy services can now use the flat rate applicable to "business services not listed elsewhere" the rate for which is 12%.
 

Previously all engineering consultants were advised to register under the category for civil engineers with a flat rate of 14.5%.  A recent tribunal found that other engineering consultants, such as mechanical engineers could register under "business services not listed elsewhere" which carries a flat rate of 12%.


The 2.5% change in rate could represent a considerable saving over the course of a year and therefore anyone affected by these category changes should consider changing their category.  However, this is usually done on the anniversary of when you joined the FRS (Flat Rate Scheme).


For further details see the guidance in Vat Notice 733.

 

 


By: Karen Lowen
On:16-05-2016
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