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Into the sunset
KEY POINTS
- Limited cost business category for the flat rate scheme was introduced a year ago.
- Cost and time-saving advantages must be weighed against not claiming input tax.
- Some categories remain worth considering.
- Flat rate scheme benefits are now negligible in most cases.
It is just over one year since the most important date in the history of the flat rate scheme (FRS) when a new category was introduced for a ‘limited cost business’ on 1 April 2017.
The new 16.5% rate applies to users that spend either less than 2% of their gross sales on goods or £250 in a VAT quarter. The excessively high rate has wiped out the financial gains previously enjoyed by thousands of businesses. In fact I wonder how much of the recent good news about the public...
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