VAT Flat Rate Scheme

Eligibility

You can join the Flat Rate Scheme if:

  • you’re a VAT-registered business
  • you expect your VAT taxable turnover to be £150,000 or less (excluding VAT) in the next 12 months

VAT taxable turnover is the total of everything sold that is not VAT exempt.

Exceptions

You cannot use the scheme if:

  • you left the scheme in the last 12 months
  • you committed a VAT offence in the last 12 months, for example VAT evasion
  • you joined (or were eligible to join) a VAT group in the last 24 months
  • you registered for VAT as a business division in the last 24 months
  • your business is closely associated with another business
  • you’ve joined a margin or capital goods VAT scheme

You cannot use the scheme with the Cash Accounting Scheme. Instead, the Flat Rate Scheme has its own cash-based method for calculating the turnover.

Leaving the scheme

You must leave the scheme if:

  • you’re no longer eligible to be in it
  • on the anniversary of joining, your turnover in the last 12 months was more than £230,000 (including VAT) - or you expect it to be in the next 12 months
  • you expect your total income in the next 30 days alone to be more than £230,000 (including VAT)