Flat Rate VAT Changes April 2017

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The rules for the flat rate VAT scheme have changed recently. From April 2017, you can still be on the flat rate scheme, but if you are something called a limited cost trader, then you may not be able to claim your normal VAT rate of, say, 14.5% or 12.5%. What is a limited cost trader? If you are spending less than £1000 or 2% of your turnover on goods, then you are called a limited cost trader. What are those goods? Well there's something called relevant goods. These are things that you would use in your business to help you run your business. What it is not, is services, so your accountant's bill is a service and not a relevant good; the gas electricity you might buy; consulting fees; the printing you've just done; people to go out and deliver leaflets for you; advertising marketing spend. These are all services. They are not goods. • Have a chat to your accountant. I'm sure they know the rules. If they're not too sure, then quote them VAT notice 733, section 4.5 and 4.6, and they should be able to advise you what to do. Alternatively, you could contact us. Have a great day. • PS: I do have a facebook group set up specifically for musicians, singers, dancers, actors, voiceovers and others in the performing starts were weekly posts will be put that are geared to accounts and tax. Also it’s a place to ask general questions on UK tax accounts that affect our industry. Please request to join, and don’t be worried about asking what you need to know. The link is here / performerstax

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