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Tax ReliefUK-wide

VAT Flat Rate Scheme

HM Revenue & Customs

Description

Optional simplified VAT accounting scheme for small businesses: instead of reclaiming VAT on every purchase, you pay a fixed percentage of VAT-inclusive turnover to HMRC, reducing admin burden and, for some low-cost-input businesses, the net VAT paid.

Amount

Flat rate percentages set by trade sector, from around 4% (e.g. food/confectionery/newspaper retailers) up to 14.5% (e.g. computer/IT consultancy); 1% discount in your first year of VAT registration; 16.5% for 'limited cost traders' regardless of sector

Deadline

Rolling / no fixed deadline

Eligibility summary

  • Available across the whole UK (England, Scotland, Wales, and Northern Ireland).
  • Applicant must be a registered business.
Notes
Not automatically the cheapest option — businesses with high VATable costs are often better off on standard VAT accounting. A 'limited cost trader' rate of 16.5% applies regardless of sector to businesses spending little on goods, specifically to reduce the benefit for such businesses.
Requirement
Available to VAT-registered businesses with expected VAT-taxable turnover of £150,000 or less (excluding VAT) in the next 12 months; must leave once turnover exceeds £230,000.

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You can also do this yourself for free via the official source

How to apply

Apply to join via your VAT online account or by post; can leave at any time and must leave once no longer eligible.

View official source

Last verified: 23 August 2026. See the footer disclaimer — this is general information, not financial or tax advice.