Last time we discussed being VAT registered and briefly mentioned the different types of VAT schemes that are available to businesses. Are you on the best scheme for your business?
The most common schemes used are Standard VAT Accounting, the Cash Accounting Scheme and the Flat Rate Scheme.
If using the Standard VAT Accounting scheme VAT is paid on the date both the sales and purchase invoices are issued. This compares to the Cash Accounting scheme whereby VAT is accounted for on the date your customer pays you and the date you pay your suppliers. This scheme can help with cashflow if you have slow paying customers.
Another popular scheme is the Flat Rate scheme where you pay a fixed percentage of your gross turnover. This can reduce the time spent maintaining records meaning you have more time to run your business.
Not everyone can join these schemes as there are certain conditions to meet but should you wish to find out if your business is eligible please do not hesitate to contact us.