VAT Flat Rate Scheme

FRS2200 - Policy and Background: What are the policy principles underlying the scheme?

An overview is given in . You should bear in mind the following policy principles when dealing with queries about the scheme:

• The scheme calculates net tax by reference to flat rate percentages. Those flat rate percentages are simply a short cut to calculating net tax and are not 바카라 사이트渞ates of VAT.바카라 사이트� That is why FRS users issue invoices for the normal VAT rate for the supply.
• The scheme does not negate a business바카라 사이트� 바카라 사이트榬ight to deduct바카라 사이트� input tax, as the flat rate percentages have an allowance for input tax built into them. The flat rate scheme simply removes the need to calculate output tax and input tax separately.
• The FRS is a 바카라 사이트榮pecial scheme for small undertakings바카라 사이트� and operates under a special provision of Council Directive 2006/112/EC (Article 281). It must be revenue neutral in its application across the board, although individual businesses may be 바카라 사이트渨inners바카라 사이트� or 바카라 사이트渓osers바카라 사이트�. However, the scheme remains valid because the flat rate percentages are set to provide tax neutrality across the eligible population.