Hello,
I need some advice with regards to different schemes of VAT.
I am starting a new service business and I have been adviced by another businessman to register flat rate VAT. I am considering to change my accountant as the communication between us takes ages and I neeed effecient and reliable person to deal with my issues. However, I would like to have a secondary business, trading with the same company, е-commerce business, buying goods and selling them on ebay. I know that with the flat rate I cannot reclaim VAT on purchases, except in certain circumstances.
My priority will be the service business. I do not want to set up another company.
Any suggestions what scheme I have to register?
Thank you very much in advance.
Reply With Quote
Hi Mihaela,
You are correct that you cannot recover VAT on purchases under the flat rate scheme. I cannot say whether you will be better be under this scheme as it depends on your particular circumstances. You will need to work out your estimates sales and purchases and see whether the standard or flat rate VAT would be more profitable. See the top of this page for an example of this calculation:
http://www.solaraccounts.co.uk/help/notes-on-the-flat-rate-scheme-for-vat.php
Regards,
