Flat Rate VAT Scheme

The flat rate VAT accounting scheme, you calculate the VAT due as a percentage of your turnover; instead of calculating the difference between the actual VAT you have charged and paid.

The flat rate % used depends on your type of business, The HMRC has calculated that you should end up paying them the same on a full VAT calculation; I have seen huge advantages for some clients that operate really lean businesses. You get a 1% discount on the flat rate VAT if you use this during your first year of registration.

Your business needs to turnover less than £150,000 in the 2nd year from registration, once you’re using the scheme you can continue until your sales/income exceeds £230,000.

Type of business

Current VAT flat rate (%)

Accountancy or book-keeping

14.5

Advertising

11

Agricultural services

11

Any other activity not listed elsewhere

12

Architect, civil and structural engineer or surveyor

14.5

Boarding or care of animals

12

Business services not listed elsewhere

12

Catering services including restaurants and takeaways

12.5

Computer and IT consultancy or data processing

14.5

Computer repair services

10.5

Entertainment or journalism

12.5

Estate agency or property management services

12

Farming or agriculture not listed elsewhere

6.5

Film, radio, television or video production

13

Financial services

13.5

Forestry or fishing

10.5

General building or construction services*

9.5

Hairdressing or other beauty treatment services

13

Hiring or renting goods

9.5

Hotel or accommodation

10.5

Investigation or security

12

Labour-only building or construction services*

14.5

Laundry or dry-cleaning services

12

Lawyer or legal services

14.5

Library, archive, museum or other cultural activity

9.5

Management consultancy

14

Manufacturing fabricated metal products

10.5

Manufacturing food

9

Manufacturing not listed elsewhere

9.5

Manufacturing yarn, textiles or clothing

9

Membership organisation

8

Mining or quarrying

10

Packaging

9

Photography

11

Post offices

5

Printing

8.5

Publishing

11

Pubs

6.5

Real estate activity not listed elsewhere

14

Repairing personal or household goods

10

Repairing vehicles

8.5

Retailing food, confectionery, tobacco, newspapers or children’s clothing

4

Retailing pharmaceuticals, medical goods, cosmetics or toiletries

8

Retailing not listed elsewhere

7.5

Retailing vehicles or fuel

6.5

Secretarial services

13

Social work

11

Sport or recreation

8.5

Transport or storage, including couriers, freight, removals and taxis

10

Travel agency

10.5

Veterinary medicine

11

Waste or scrap dealing

10.5

Wholesaling agricultural products

8

Wholesaling food

7.5

Wholesaling not listed elsewhere

8.5

*‘Labour-only building or construction services’ means building services where the value of the materials supplied is less than 10% of the turnover for those services. If more than this amount, the business is classed as ‘General building or construction services’.

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