VAT Flat Rate Scheme Percentages

Since 1st April 2017 a new rate of 16.5% applies to “limited cost traders”.
Broadly, a limited cost trader is one whose VAT-inclusive expenditure on goods is either:
  • less than 2% of its VAT-inclusive turnover in a VAT return period; or
  • greater than 2%, but less than £1,000 per annum (time apportioned for shorter return periods, e.g. £250 for a VAT quarter).
The following rates will apply from 4th January 2011 until further notice.
Business category
Percentage
Accountancy or bookkeeping
14.5
Advertising
11
Agricultural services
11
Any other activity not listed elsewhere
12
Architect, civil and structural engineer or surveyor
14.5
Boarding or care of animals
12
Business services that are not listed elsewhere
12
Catering services including restaurants and takeaways
12.5
Computer and IT consultancy or data processing
14.5
Computer repair services
10.5
Dealing in waste or scrap
10.5
Entertainment or journalism
12.5
Estate agency or property management services
12
Farming or agriculture that is not listed elsewhere
6.5
Film, radio, television or video production
13
Financial services
13.5
Forestry or fishing
10.5
General building or construction services*
9.5
Hairdressing or other beauty treatment services
13
Hiring or renting goods
9.5
Hotel or accommodation
10.5
Investigation or security
12
Labour-only building or construction services*
14.5
Laundry or dry-cleaning services
12
Lawyer or legal services
14.5
Library, archive, museum or other cultural activity
9.5
Limited cost traders
16.5
Management consultancy
14
Manufacturing that is not listed elsewhere
9.5
Manufacturing fabricated metal products
10.5
Manufacturing food
9
Manufacturing yarn, textiles or clothing
9
Membership organisation
8
Mining or quarrying
10
Packaging
9
Photography
11
Post offices
5
Printing
8.5
Publishing
11
Pubs
6.5
Real estate activity not listed elsewhere
14
Repairing personal or household goods
10
Repairing vehicles
8.5
Retailing food, confectionary, tobacco, newspapers or children’s clothing
4
Retailing pharmaceuticals, medical goods, cosmetics or toiletries
8
Retailing that is not listed elsewhere
7.5
Retailing vehicles or fuel
6.5
Secretarial services
13
Social work
11
Sport or recreation
8.5
Transport or storage, including couriers, freight, removals and taxis
10
Travel agency
10.5
Veterinary medicine
11
Wholesaling agricultural products
8
Wholesaling food
7.5
Wholesaling that is not listed elsewhere
8.5

“Labour-only building or construction services” relates to building or construction services where the value of materials supplied is less than 10% of turnover from such services. If more than this then the services are covered by rate applying to “General building or construction”.

Other building or construction services are covered by rate applying to “General building or construction”.

The limited cost trader rate applies to businesses which incur costs relating to the supplies they make where:

  • the VAT-inclusive cost of goods is below 2% of total VAT-inclusive turnover
  • the VAT-inclusive cost of goods is greater than 2% but less than £1,000.

Where the VAT return is for less than one year, the figure lmits must be reduced proportionately.

The following items are excluded for the purposes of working out the value of purchases:

  • Services
  • Capital expenditure such as office equipment, laptops, mobile phones and tablets
  • Food or drink that is consumed by businesses or employees
  • Motoring costs including vehicles, vehicle parts and fuel
  • Goods, such as promotional items, gifts or donations
  • Items used for business and private use, e.g. stationery including printer ink

For more information, we provide a Business Consultation to ensure our clients benefits from tax planning and accounting matters.

For any assistance contact Companies999, we will be happy to help you!

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