The taxable turnover threshold for registering for VAT will increase from £83,000 to £85,000 from 1 April 2017. The threshold for deregistration will rise from £81,000 to £83,000.
The standard VAT rate will remain unchanged at 20% for most goods and services. The rate for some goods and services, such as children car seats and home energy will remain at a reduced rate of 5%.
VAT Flat Rate Scheme
Businesses classified as ‘limited cost traders’ and eligible to use the flat rate scheme will have to account for VAT at 16.5% of their relevant gross turnover.
‘Limited cost traders’ are defined as those that spend:
- less than 2% of their VAT inclusive turnover on goods in accounting, or
- more than 2% of their VAT inclusive turnover but less than £1,000 a year.
Capital goods such as new equipment, food and drink and vehicles are not excluded.
For any help or advice with financial planning talk to RPD