Businesses that are deemed to be “low cost traders”, which means those that:
Spend less than 2% of their turnover on consumables/stock/leasing equipment (and more than £1k) annually;
Will pay 19.98% VAT on their net sales to HMRC, with no deduction for VAT on their purchases.
In this scenario, the businesses that meet the definition of “low cost trader” should either de-register from VAT entirely (if they are below the VAT de-registration threshold), or alternatively, leave the VAT Flat Rate Scheme.
This is effective from 1st April 2017. Our affected clients have already been notified, and advised accordingly. Some clients we are undertaking the work on their behalf.
If your business is in the Guildford area, and you would like an accountant to advise or help you with this and your other accounting and tax needs, do please get in touch with Numerica.