What is Flat Rate VAT?

Flat Rate VAT is a VAT scheme that allows you to calculate the VAT you pass on to HMRC in a different way to the Standard Scheme.

Under Standard VAT the VAT bill is calculated by deducting the VAT you have spent on purchases from the VAT you have charged on Sales. Under Flat Rate you apply a % to your VAT inclusive sales. This % depends on the industry you are in.

It is designed to minimise admin as unlike Standard Scheme you do not need to collect VAT records for your purchases.

For more information see: https://www.gov.uk/vat-flat-rate-scheme