Comments on: VAT flat rate scheme 11.5% rather than 13% from 1st December 2008

By: Ian

Ian — Fri, 05 Dec 2008 14:09:35 +0000

So much for the promise we wouldn’t be worse off.

We are £4.50 per £1000 worse off. Your business would need to spend £180 per £1000 turnover on VAT’able goods to recoup those losses on VAT no longer paid on those goods and services.

Under the old scheme

1000+17.5% = 1175 gross
1175-13%=152.17 vat to pay back
175-152.17=22.25 to keep

Under the new scheme

1000+15%=1150 gross
1150-11.5%=132.25 VAT to pay back
150-132.25=17.75 to keep

By: rozzamozza

rozzamozza — Fri, 28 Nov 2008 16:12:34 +0000

The point is you DONT pay 130 to HMRC. You shoud be paying 13% or your GROSS I.e. 13% of 1175

Now yo uwill be paying 11.5% of your new gross 1150

I make it 0.45% of a loss. Still worse off but not by 1%

By: chris_c

chris_c — Thu, 27 Nov 2008 16:39:21 +0000

Rufus if yout chargint 1000 Net then that 175 vat, you then pay 130 to HMRC,

under the new scheme 1000 Net, then 150 vat you pay 115 to the HMRC,

so your worse off by 1% as before you would have kept 45 piounds per thousand net and now only 35 the only good news is the delay to the revenue splitting changes also when it goes back up the flat rate will probably change to 14% automagically..

By: Rufus Maychild

Rufus Maychild — Thu, 27 Nov 2008 12:41:41 +0000

This is surely bad maths – since the 11.5% is computed on a lower gross value. Seems to me one is now actually 0.05 % better off (£5 per £10K net sales)

By: Nigel Thomas

Nigel Thomas — Thu, 27 Nov 2008 09:43:43 +0000

That’s an extra 1% of my gross income gone for the next year or two … and what’s the chance of the rate improving later?

Don’t forget to calculate your flat rate for November and any preceding months in your VAT quarter at 13% and for December and subsequent at 11.5%. If you use 11.5% for the whole period you’ll be under-reporting.

What fun.