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In case your business is in an EU country that has adopted vat then you can opt for flat rate vat if you want to simplify your accounting and also be away from presenting vat figures fully detail. This scheme enables you to simply calculate a prescribed amount of your vat inclusive sales as the final vat figure without going into intricate sale or purchase details, as is normally required when you file vat returns.

If you have a fundamental problem of being aware what is vat and foresee problems to maintain detailed vat accounts then you can opt for the vat flat rate scheme provided you meetthe factors set up by the tax authorities in your country. If your organization is situated in the UK then you can go for vat flat rate if your estimated sales turnover within the next year excluding vat isn't over £150,000 or including vat is not over £187,500. It is possible to remain under this scheme until your turnover touches £225,000.

Although you will still need to display the vat amount in your vat invoice, you don't need to keep a detailed account of the vat figures on your sale or purchase when you would have to do under normal vat circumstances. You'll, however not be able to go for vat reclaim just in case you choose the flat rate vat scheme. UK offers a 1% discount scheme for the first year for businesses that choose this scheme. If you happen to offer goods or services that fall under different vat rates then you'll have to apply the highest vat rate should you choose go for this scheme.

Thus, if you buy or sell services or goods under reduced vat rates or need to reclaim vat which has recently been paid this scheme wouldn't be suitable for you. However, if you mostly deal in services or goods that involve standard vat rates, do not need to have any vat refund, or take part in retail sale then your vat flat rate scheme would be perfect for you and your business. You could find added time to focus on gr