Due to coronavirus (COVID-19), new flat rate percentages from 15 July 2020 until 12 January 2021 have been announced, which include:
- Catering 4.5%
- Pubs 1%
- Hotels and accommodation 0%
The VAT flat rate you use usually depends on your business type. You may pay a different rate if you only spend a small amount on goods.
You get a 1% discount if you’re in your first year as a VAT-registered business.
If you spend a small amount on goods
You’re classed as a ‘limited cost business’ if your goods cost less than either:
- 2% of your turnover
- £1,000 a year (if your costs are more than 2%)
This means you pay a higher rate of 16.5%. You can calculate if you need to pay the higher rate and work out which goods count as costs.
If you are not a limited cost business, you use your business type to work out your flat rate.
To work out your flat rate, click here.
Please note that submission deadlines for VAT returns remain the same.
If you’re concerned about the impact that Coronavirus could have on your business, please don’t hesitate to get in touch with us.
To read news and blogs from Rebecca Austin, click here >>