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HMRC internal manual

VAT Agricultural Flat Rate Scheme

From
HM Revenue & Customs
Updated
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Appendices: Assessment of possible gain under the flat rate scheme

VATAFRS0210 and VATAFRS1500explain the context of this page.

  1. Note the estimated value of agricultural supplies declared at box 4 of the VAT 98. Check VISION to make sure that the figures in boxes 4 and 5 are reasonably consistent with the VAT returns submitted.
     
  2. If the figure given in box 4 is £75,000 or less, the farmer cannot gain more than £3,000 under the scheme. You may therefore allow certification, provided all other conditions of entry to the scheme are met.
     
  3. If the figure given in box 4 is greater than £75,000:
     

 

  1.  

    1. calculate 4% of the figure in box 4;
       
    2. calculate the amount of input tax claimed by the trader in the last 12 months (if returns are missing see item 4 below);
       
    3. subtract (b) from (a).
       
    • If the answer at (c) is £3,000 or less you may allow certification, provided all other conditions of entry to the scheme are met.
    • If the answer at (c) is more than £3,000, refuse certification.
    • But in cases where the gain is likely to be less than £3,500, you may allow certification if you are satisfied that the figures used to calculate possible gain are insufficiently accurate to be successfully defended at Tribunal. Give the benefit of the doubt to the trader.
  2. If the figure given at box 4 is greater than £75,000 but returns are missing, base the comparison between the 4% figure and the input tax claimed on returns actually submitted in the past 12 months. In effect, this will make it more difficult for the trader to satisfy the condition of not gaining more than £3,000.