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The Accountants for Growth

Flat Rate Scheme for Importers

Flat Rate Scheme for Importers

The Flat Rate Scheme is not always a good system to adopt if your business has a substantial amount of zero rated purchases as is the case when you import extensively from EU suppliers.

When you import you will still receive a zero rated invoice from your EU supplier – you then have to calculate the sterling equivalent of the VAT you need to pay over on your purchases to H.M. Revenue & Customs. Unfortunately, if you are on the flat rate scheme, you are not able to recover the same amount of VAT via the reverse charge mechanism unless the goods purchased are capital items costing over £2,000.

In effect you will be paying over VAT on the goods you import with no means of recovering the tax.

Remember, the advice given in this blog is generic and you should discuss your specific circumstances with your accountants before making any decisions.


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