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Flat rate challenges
Key points
- The flat rate scheme can be used by any business with annual taxable sales of £150 000 or less.
- HMRC’s computer may not select the most suitable scheme category.
- Register the business for VAT before applying for the flat rate scheme.
- Some business activities can fit into more than one sector so changing the category does not make the previous choice unreasonable.
- Has the flat rate scheme gone past its sell-by date in light of increased mandatory digitalisation?
It has been a long time since I have written about the flat rate scheme (FRS). The reasons are simple: the introduction of the ‘limited cost trader’ category in April 2017 and its draconian rate of 16.5% has made the scheme as attractive as a cold pint of beer on a rainy day at the seaside. It has really been a no-go area since then although many businesses...
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