The Value Added Tax (Amendment) Regulations, SI 2017/295, introduce a new flat-rate of 16.5% for those who fall within the definition of ‘limited cost trader’ from 1 April 2017. As announced at the Autumn Statement, ‘limited cost traders’ are, in broad terms, those whose VAT-inclusive expenditure on goods is less than 2% of their turnover in a period, or less than £1,000 per annum. Where a trader’s accounting period straddles 1 April 2017, the new rate will only apply for the portion of the period falling after that date. A reduction of 1% will apply during the first period of new VAT registrations. HMRC published a draft of the regulations for consultation in December 2016.
The Value Added Tax (Amendment) Regulations, SI 2017/295, introduce a new flat-rate of 16.5% for those who fall within the definition of ‘limited cost trader’ from 1 April 2017. As announced at the Autumn Statement, ‘limited cost traders’ are, in broad terms, those whose VAT-inclusive expenditure on goods is less than 2% of their turnover in a period, or less than £1,000 per annum. Where a trader’s accounting period straddles 1 April 2017, the new rate will only apply for the portion of the period falling after that date. A reduction of 1% will apply during the first period of new VAT registrations. HMRC published a draft of the regulations for consultation in December 2016.
