14/07/2026
Not every VAT-registered business should join the VAT Flat Rate Scheme—but for the right business, it can save a significant amount of money.
The Flat Rate Scheme allows eligible businesses to pay HMRC a fixed percentage of their VAT-inclusive turnover instead of accounting for VAT in the usual way. Whether it’s beneficial depends on factors such as your industry, your turnover, and how much VAT you reclaim on your purchases.
In this case, HMRC removed my client from the scheme because they believed the business had exceeded the turnover limit. We knew that wasn’t correct because we regularly review our clients’ numbers through our quarterly business reviews. We appealed the decision, HMRC agreed, and our client was reinstated onto the scheme—allowing them to continue benefiting from it.
Every business is different, so don’t assume the Flat Rate Scheme is right (or wrong) for you. A quick review with your accountant could make a big difference to how much VAT you pay.