Are you eligible for flat rate VAT?

finance

As a freelancer you can join the flat rate VAT if your VAT taxable turnover (your turnover of all goods and services sold that aren’t tax exempt) is lower than than £150,000.

When you’re not able to join the flat rate VAT scheme

You aren’t able to join the flat rate VAT scheme if:

  • You left it in the past 12 months.
  • You’ve committed a VAT offence in the last 12 months.
  • You’ve registered for VAT as a business division in the last 24 months.
  • You’ve joined, or were eligible to join, a VAT group in the last 24 months.
  • You’ve already joined a capital goods or margin VAT scheme.

You also can’t join the flat rate VAT scheme if your freelance business is closely associated with another business. This means:

  • One business is under the dominant influence of another.
  • The companies are closely bound by financial, economic and organisational links.
  • The other business has the right to give directions to you.
  • Your business usually complies with the directions of the other company.

When you need to leave the flat rate VAT scheme

You must leave the flat rate VAT scheme if:

  • You are no longer eligible for it.
  • On the anniversary of joining your turnover for the last 12 months was more than £230,000.
  • On the anniversary of joining you expect your turnover to be more than £230,000 in the next 12 months.
  • You expect your income to be more than £230,000 in the next 30 days.

How to apply for flat rate VAT as a freelancer

If you’re eligible for the flat fate VAT scheme, you can apply for it online when you register for VAT. You can also download form VAT600 and return to HMRC (you can find the address on the form).

If like many freelance working mums you use an accountant, they can help you work out if you’re eligible for flat rate VAT and apply for you.

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