IOM Tax Solutions
Taxation without representation is tyranny
We will deal with your local registration and filing of returns.
Considerations for small business are the cash accounting schemes and Flat Rate schemes which can both be extremely beneficial.If cash flow is an issue for your business then you should consider using the cash accounting scheme. VAT is payable on a receipts & payments basis as opposed to referral to invoices. If invoices are late being settled this can cause cashflow difficulties for your business.The flat rate scheme utilises a flat rate applied to the Gross sales inc VAT. It is relatively simple to administer which is one good reason to consider it. However this scheme is not suitable for all businesses. The IOM is part of the UK for VAT purposes and although the IOM has its own law, it mirrors the UK. There are many alternative and specific VAT schemes available which apply across business. It is important that you start off properly as a mistake early on can prove very costly in the future.
What we do for you
How you benefit
Flat Rate Scheme
For certain businessís the VAT Flat Rate scheme can be an attractive option. In order to be eligible the Company forcasted turnover excluding VATmust be initially less than £150,000. That being the case it is important to carefully compare and contrast the outcomes of using the normal and Flat rate scheme procedures to ensure it is beneficial. IOM Tax Solutions has several clients who are significantly benefitting from using this scheme. This can mean a much lower VAT bill and more time to complete the expenses side of your bookkeeping.
When the Flat Rate Scheme is implemented the business continues to operate in the same way charging standard rate VAT. However the VAT paid to HMRC is calculated using a flat rate applied to the gross income. So the VAT calculation suddenly becomes rather more straightforward as it is purely based upon the businessís sales. Different flat rates apply which depend upon the category of business you are in.
The Flat Rate Scheme is not suitable to all businesses as VAT is chargeable on the businessís total income irrespective of whether it is zero or exempt supply.
Effective from 1 April 2017 businesses must supply a minimum of 2% or £250 of their sales as goods to qualify for the reduced rate, or a modified 16.5% rate will be applied. This is intoduced to attack consultancy workers who HMRC say are abusing the scheme. In fact HMRC quite clearly set the rates up so only have themselves to blame. This change will affet those who do not make a supply of goods with their services
Invoices raised normally plus 20% VAT
VAT paid calculated on Gross income at a flat rate
Capital goods scheme - VAT input allowed on singular purchase capital assets exceeding £2,000 (one invoice)
IOM Tax Solutions provides Bookkeeping accounting and tax Services.