Who is eligible for the VAT Flat Rate Scheme?

Businesses with a taxable turnover (excluding VAT) of £150,000 or less per year can join the FRS. You cannot use it if you left the scheme in the last 12 months or have been convicted of a VAT offence.

What flat rate percentage applies to my business?

HMRC publishes sector-specific flat rates ranging from 4% to 16.5%. Common examples include IT consultancy at 14.5%, management consultancy at 14%, and catering at 12.5%. Always check the current HMRC list.

Is a 1% discount available?

Yes — a 1% discount is applied during the first year of VAT registration. Enter your effective flat rate (e.g. 13.5% instead of 14.5%) if this applies to you.

VAT Flat Rate Scheme Calculator

Under the Flat Rate Scheme, you pay HMRC a fixed percentage of your VAT-inclusive turnover instead of calculating VAT on every transaction. Enter your details to see your VAT saving.

How it's calculated

VAT Payable = Gross Turnover × Flat Rate %

VAT charged to customers is still at 20%, so your saving is the difference between the 20% VAT you collected and the lower flat rate you pay to HMRC.

Frequently Asked Questions

Who is eligible for the VAT Flat Rate Scheme?: Businesses with a taxable turnover (excluding VAT) of £150,000 or less per year can join the FRS. You cannot use it if you left the scheme in the last 12 months or have been convicted of a VAT offence.
What flat rate percentage applies to my business?: HMRC publishes sector-specific flat rates ranging from 4% to 16.5%. Common examples include IT consultancy at 14.5%, management consultancy at 14%, and catering at 12.5%. Always check the current HMRC list.
Is a 1% discount available?: Yes — a 1% discount is applied during the first year of VAT registration. Enter your effective flat rate (e.g. 13.5% instead of 14.5%) if this applies to you.