[HampshireWindowCleaning]

Can anyone confirm what the flat rate VAT rate is for us, I thought it was 12% but heard recently someone say it was 16% for window cleaning companies

[richard connett]

It’s 12. Discounted to 11 for your first year

[Crystal-clear]

Some major changes came into place 2017 to the FRS

The detailed guidance for the FRS is here: https://www.gov.uk/government/publications/vat-notice-733-flat-rate-scheme-for-small-businesses/vat-notice-733-flat-rate-scheme-for-small-businesses#foreword

Some key points out of that:
There is no specific or seemingly related percentage for cleaning - so the 12% figure would be a reasonable assumption 11% with the first year discount.

However this all depends if you qualify for that rate And it all depends if your classed as a limited cost business or not.

It's essential to read the next paragraph

"You’re a limited cost business if the amount you spend on relevant goods including VAT is either:
less than 2% of your VAT flat rate turnover
greater than 2% of your VAT flat rate turnover but less than £1,000 per year."

Basically any equipment you buy like poles they're a capital purchase unless you throw them away within the year even if you sell them they will still be classed as a capital item. So purchasing poles and then throwing them away classing them as goods would be a huge false economy you'll also not be able to claim the vat back which you can do on flat rate if the purchase is more then £2,000.

Special rules regarding diesel that's not permitted.

In a nutshell on £100000 turnover there's £4,000 in it between 16.5 % and 12% on vat payouts.
If it turns out you are not a limited cost business it's likely any VAT savings you make will be consumed on goods therefore being in the same financial position as as paying 16 and a half percent if that makes sense. So if you genuinely are a limited cost business you're actually in a good position so don't look at that 4.5 percent begrudgingly because your saving that anyway on costs!

With that said it's essential that you have a good accountant who if you explain everything to your costs he should be able to to figure out out what scheme you should go on sometimes the standard rate can be more beneficial. And in turn if your costs of goods he can can identify fall into the category then certainly you will have the lower rate.
 
Get yourself a good accountant but
I hope my explanation helps somewhat for now:)

[Crystal-clear]

Some major changes came into place 2017 to the FRS

The detailed guidance for the FRS is here: https://www.gov.uk/government/publications/vat-notice-733-flat-rate-scheme-for-small-businesses/vat-notice-733-flat-rate-scheme-for-small-businesses#foreword

Some key points out of that:
There is no specific or seemingly related percentage for cleaning - so the 12% figure would be a reasonable assumption 11% with the first year discount.

However this all depends if you qualify for that rate And it all depends if your classed as a limited cost business or not.

It's essential to read the next paragraph

"You’re a limited cost business if the amount you spend on relevant goods including VAT is either:
less than 2% of your VAT flat rate turnover
greater than 2% of your VAT flat rate turnover but less than £1,000 per year."

Basically any equipment you buy like poles they're a capital purchase unless you throw them away within the year even if you sell them they will still be classed as a capital item. So purchasing poles and then throwing them away classing them as goods would be a huge false economy you'll also not be able to claim the vat back which you can do on flat rate if the purchase is more then £2,000.

Special rules regarding diesel that's not permitted.

In a nutshell on £100000 turnover there's £4,000 in it between 16.5 % and 12% on vat payouts.
If it turns out you are not a limited cost business it's likely any VAT savings you make will be consumed on goods therefore being in the same financial position as as paying 16 and a half percent if that makes sense. So if you genuinely are a limited cost business you're actually in a good position so don't look at that 4.5 percent begrudgingly because your saving that anyway on costs!

With that said it's essential that you have a good accountant who if you explain everything to your costs he should be able to to figure out out what scheme you should go on sometimes the standard rate can be more beneficial. And in turn if your costs of goods he can can identify fall into the category then certainly you will have the lower rate.
 
Get yourself a good accountant but
I hope my explanation helps somewhat for now:)

Come on! I put alot into that! And not a single like!!    dare I say perhaps the best flat rate little explanation ever on par with an account not bad from a shiner if I may say so myself!