VAT focus: The three VAT simplification schemes for SMEs

Kevin Hall

Kevin Hall provides a ‘back to basics’ guide to the flat rate scheme, the cash accounting scheme and the annual accounting scheme

It is perhaps an understatement to say that VAT can be a complex tax.

Although it is impossible to remove all pitfalls busy practitioners can simplify things for their small and medium-sized (SME) clients. In this article I consider three VAT simplification schemes namely:

the flat rate scheme;
the cash accounting scheme; and
the annual accounting scheme.

HMRC intends these schemes to reduce the administrative burden of accounting for VAT. However each of the schemes can also cause problems for businesses and their accountants.

The flat rate scheme (FRS)

The rules for the flat rate scheme are contained...

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Kevin Hall provides a ‘back to basics’ guide to the flat rate scheme, the cash accounting scheme and the annual accounting scheme

It is perhaps an understatement to say that VAT can be a complex tax.

the flat rate scheme;
the cash accounting scheme; and
the annual accounting scheme.

HMRC intends these schemes to reduce the administrative burden of accounting for VAT. However each of the schemes can also cause problems for businesses and their accountants.