The following article covers:
What is VAT?
Value Added Tax, or VAT, is a business Tax that is charged on the sale of goods and services in the UK and the European Union. The standard rate of VAT is 20%, however certain goods and services are charged at 5% or 0%. VAT collected by VAT registered businesses is reported and paid over to HMRC every quarter.
What is the VAT Flat Rate Scheme (FRS)?
The Flat Rate Scheme is a simplified form of operating VAT designed for smaller businesses and the self-employed. It works by charging VAT, at the relevant rate, on all your invoices and paying over to HMRC at a fixed percentage, depending on your trade or profession. For example, if you’re in Construction then you pay VAT over to HMRC at 14.5% and Couriers or Taxi Drivers pay over at 10%. The difference between what you charge, and what you pay to HMRC you get to keep. We’ll give you advice to help you get the best benefit from your FRS registration.
I'm not a limited business, can I still register for VAT?
You do not need to be a Ltd business to be VAT registered. As a self-employed sole trader you are, in fact, your own business. You work for yourself and are entitled to the benefits of being VAT registered.