Changes to VAT flat rate scheme

UK VAT Flat Rate Changes

The VAT reduction from 17.5% to 15% is going to hit smaller online retailers even harder than I suggested in yesterday’s article about reductions in VAT.

Ally Darling hasn’t reduced the VAT flat rate scheme by the same level that the main level as the standard VAT rate. For those that aren’t aware of Flat rate VAT, if you run a small to medium size business online, or otherwise, and you don’t have the need to buy stock, petrol, etc. and you pay VAT to the government, but pay little VAT on business purchases so that you can claw it back, you can opt for Flat rate VAT scheme.

This means that you were charging 17.5%, but only passing on the percentage of flat rate for your industry: 10% for computer repair services, 12% for legal services, etc. Now the same businesses are only charging 15% and  still have the same percentage to pass on to the government. A few of the VAT flat rate percentages have dropped by half or one percent, but I could find none that had dropped by 2.5%, which surely is the easiest, straight forward and fair way to do it?

The new VAT Flat Rate scheme percentages:

The government are keeping the non-reduction of the VAT flat rate scheme percentages close to their chest, but the list below shows the new flat rates of VAT for each sector:

Accountancy or book-keeping (11.5%)
Advertising (8.5%)
Agricultural services (7%)
Any other activity not listed elsewhere (9%)
Architect, civil and structural engineer or surveyor (11%)
Boarding or care of animals (9.5%)
Business services that are not listed elsewhere (9.5%)
Catering services including restaurants and takeaways (10.5%)
Computer and IT consultancy or data processing (11.5%)
Computer repair services (10%)
Dealing in waste or scrap (8.5%)
Entertainment or journalism (9.5%)
Estate agency or property management services (9.5%)
Farming or agriculture that is not listed elsewhere (5.5%)
Film, radio, television or video production (9.5%)
Financial services (10.5%)
Forestry or fishing (8%)
General building or construction services (7.5%)
Hairdressing or other beauty treatment services (10.5%)
Hiring or renting goods (7.5%)
Hotel or accommodation (8.5%)
Investigation or security (9%)
Labour-only building or construction services (11.5%)
Laundry or dry-cleaning services (9.5%)
Lawyer or legal services (12%)
Library, archive, museum or other cultural activity (7.5%)
Management consultancy (11%)
Manufacturing that is not listed elsewhere (7.5%)
Manufacturing fabricated metal products (8.5%)
Manufacturing food (7%)
Manufacturing yarn, textiles or clothing (7.5%)
Membership organisation (5.5%)
Mining or quarrying (8%)
Packaging (7.5%)
Photography (8.5%)
Post offices (2%)
Printing (6.5%)
Publishing (8.5%)
Pubs (5.5%)
Real estate activity not listed elsewhere (11%)
Repairing personal or household goods (7.5%)
Repairing vehicles (6.5%)
Retailing food, confectionery, tobacco, newspapers or children’s clothing (2%)
Retailing pharmaceuticals, medical goods, cosmetics or toiletries (6%)
Retailing that is not listed elsewhere (5.5%)
Retailing vehicles or fuel (5.5%)
Secretarial services (9.5%)
Social work (8%)
Sport or recreation (6%)
Transport or storage, including couriers, freight, removals and taxis (8%)
Travel agency (8%)
Veterinary medicine (8%)
Wholesaling agricultural products (5.5%)
Wholesaling food (5%)
Wholesaling that is not listed elsewhere (6%)

Obviously, check these figures with your VAT man or your accountant befor making this month’s Flat rate scheme payment, as although I believe these figures to be accurate at the time of writing - knowing Captain Darling, the VAT flat scheme figures could change overnight!

When is this blundering buffoon going to realise that he’s not helping small businesses in any way with these ridiculous VAT changes and that his massive cock-up is going to see VAT having to be raised to 18.5% or 19% in a year’s time to compensate for his incompetence? I really can’t believe he’s Scottish!

2 Responses to “Changes to VAT flat rate scheme”

John Adam Says:

Well a year’s gone by and VAT *isn’t* having to be raised to 18.5% or 19%. Who’s the blundering buffoon now then? a) The scotsman pulling every available lever to beat the recession? …or b) The scotsman promoting himself on a website?
And a year on, the country isn’t in the worst financial state than it’s ever been and we haven’t had a record number of businesses going under? Comments from a racist prat, who makes no argument whatsoever and doesn’t even have the balls to identify himself are what I’d expect from a Labour supporter! Or are you BNP? Twat! BM

Robert Suskay Says:

Good day. I wish to find out if you have an RSS Feed so I can register to it. I surely loved your post and I really want to keep informed. Maintain the good work and thanks in advance. If you look at the top right hand side of the screen, you will see a large RSS symbol. Click on that and copy the URL into your aggregator. Have a fine day. BM

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