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Deciding when an incorporated business must leave the VAT flat rate scheme
A partnership client became VAT-registered and joined the flat rate scheme on 1 June 2011. It applied the introductory 1% reduction to its receipts until 31 May 2012.
On 1 December 2012 the partnership was transferred as a going concern (TOGC) to a new limited company (Newco) and the VAT number was transferred. Following HMRC guidance Newco continued to apply the flat rate scheme without reapplying.
Newco’s annual sales are now approaching the £230 000 limit (including VAT) at which it must leave the scheme. My questions are as follows.
First what is the “anniversary of joining the scheme” for Newco? Is it 1 June (the original date the VAT number became part of the scheme) so that it would leave on 31 August 2015 or is it 1 December (the TOGC/incorporation date) so that it would leave on 28 February 2015?
The first date seems...
