Flat Rate Scheme

Dan Fox and Andrew James ran a session on tax mitigation and business growth strategies at the inaugural NCASS Congress.

We touched on a number of ideas during the session which we are going to expand on in the coming weeks as they will be relevant to many caterers. One question that a delegated asked was: –

If I join the VAT flat rate scheme can I claim back VAT on significant capital purchases?

Answer: if you are on the flat rate scheme you are entitled to recover input VAT on a single purchase of capital expenditure so long as the value of the purchase is £2,000 or more (including VAT).

If I buy a trailer and have it kitted out with equipment, can I recover all the input VAT?

Answer: If all the items including the trailer are purchased from the same supplier at the same time, then they count as one purchase of capital expenditure goods and so long as the cost is over £2,000 in total then the input VAT can be reclaimed.  If the trailer and the equipment are purchased from different suppliers at different times then they will be treated as separate purchases and each much cost over £2,000 to qualify for a reclaim of VAT.

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