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Flat computer

02 October 2012
Issue: 4373 / Categories: Forum & Feedback , VAT
An IT manager set up his own business as a consultant and registered for VAT and the flat rate of 13.5% for that sector. This aspect of his work did not develop, but computer repair work did and after his first year he is now using the 10.5% rate for that activity

When my position as IT support manager for a law practice became redundant I set up in business with the intention of providing IT consultancy services to professional practices.

I registered for VAT using the flat rate scheme (FRS) for the computer and IT consultancy sector from day one: an FRS percentage of 13.5% after applying the 1% discount for the first 12 months.

It proved impossible to break into the market for outsourced IT consultancy services but I have managed to build up a reasonable computer repair business.

When I reviewed my use of the FRS after my first year I realised that I had chosen the wrong sector.

I am now using the FRS percentage for the computer repair services sector: 10.5%.

However HMRC are refusing me credit for the VAT I incorrectly accounted for in my first year saying my original...

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