Will client receive 1% redution for Flat rate scheme?

Will client receive 1% redution for Flat rate...

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I have a partnership using the Flat rate scheme for vat.  They are incorporating, new vat number etc.  I assumed originally that they would not qualify for the 1% reduction for the new company but on closer inspection I can't seem to see anything that says no and this is a new company registering for the first time?

Spoken to a VAT helpline and again not 100% clear.  Any thoughts on this would be welcome :-)

Thank you.

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By JazzySasha
08th Jun 2013 10:34

Yes

I did an online registration recently for a similar scenario - partnership changing entity to limited. As part of the process, a message came up on screen advising me that the 1% discount would apply. (I, too, was slightly surprised.)

 

I just wish I had taken a screen shot of it at the time, as the narrative was not repeated anywhere on the documentation I was able to save when the registration was completed.

 

HTH :)

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By JCresswellTax
07th Jun 2013 13:49

I can never find anything that says they wouldn't qualify

It relates to the first year of a new VAT registration so we always apply it to clients who are starting a new limited company etc.

GO FOR IT!

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By djn24
07th Jun 2013 13:55

Doesn't seem right to me but I couldn't find anything to say otherwise so think I'll go with it!

 

Thank you

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By User deleted
07th Jun 2013 15:13

You might find some resistance, but persist

Not long after the Scheme was introduced, I made a similar "claim" on behalf of a company. HMRC tried several times to disallow the discount, on the grounds that the business had been transferred as a TOGC and the effective date of registration was therefore that of the partnership. And indeed in that case the VAT number had been transferred - nevertheless, HMRC were eventually persuaded that the 1% discount must apply because it is given during the registered entity's first year of registration. The TOGC status etc was irrelevant because the company did not exist until just before incorporation of the partnership and therefore could not in fact have been registered from any earlier date. As I say, they took some convincing but we got there in the end.

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