Moving from the VAT Flat Rate Scheme to the Standard Scheme may be voluntary or compulsory, if you have exceeded the set Flat Rate Limits. You may have discovered that:
- Being part of the VAT flat rate scheme is no longer beneficial because your VATable purchases have gone up;
- You’ve fallen into the criteria of Limited Cost Trader;
- Your turnover has increased beyond the threshold for the Flat Rate Scheme;
Whatever your reason for needing to move from the VAT Flat Rate Scheme to the Standard Scheme, you will need to contact HMRC to notify of your intentions and give them a brief reason as to why you have chosen to move schemes.
You can read more about Leaving the Flat Rate VAT Scheme in my recent blog where you can find out how to notify them, download a letter template to send to HMRC and find out whether you are entitled to claim back any of the VAT you may have previously paid on inputs but not recovered.
If you are voluntarily choosing to leave the Flat Rate Scheme for the Standard Scheme then you may want a copy of my VAT Flat Rate Scheme Calculator, which will estimate your VAT under both schemes. Just enter your email address below and I will send you a copy.