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• # 74676
• Tue 27 Sep 2011 11:05 AM

Hi,
I'm new to bookkeeping and being self-employed, and I'm quite daunted by the huge range of quesions I may be asked when visiting clients!  I have two from a potential client and I can't find the answer on searching web articles, including the HMRC site.  Does anyone know, are there any rules on switching between VAT schemes?  The two scenarios are:

- can a business change from Standard to Flat rate, because they think it will be more advantageous? i.e. they'll pay less VAT? Then what happens if that's not the case after a year or so, can they switch back?
- can a new business set up as VAT registered to claim back VAT on start-up expenses e.g. computer equipment, car, then cancel VAT registration after a while as turnover will not mneet the £73k?

thanks for any help! 

Kath 

• www.AccountantsTEAM.co.uk
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• # 74688
• Wed 28 Sep 2011 08:22 AM

Hi Kayleigh

With regards to your first question you can switch VAT Schemes whenever you like as long as you meet the criteria for that scheme.

With regards to the second point this would be a definate no. HMRC have the capital goods scheme in place to clawback the VAT claimed on capital goods if a company goes from standard to exempt or de registers. This scheme is time based so if you stay registered for a say 2 years then they will base the clawback on 8 years (10 years kess the 2 you were registered for), you would then have to repay a percentage of the reclaimed VAT back to HMRC.

Kind regards
Stuart

• Forum Moderator, South East & Greater London Regional Chairman
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• # 74699
• Wed 28 Sep 2011 10:16 AM

Thanks for your help, Stuart, much appreciated.

Kath
 

• www.AccountantsTEAM.co.uk
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