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VAT Agricultural Flat Rate Scheme

Businesses that use the flat rate scheme pay VAT as a fixed percentage of their VAT inclusive turnover. The VAT Agricultural Flat Rate Scheme is a variant of the flat rate scheme specifically designed for farmers and other activities relating to agricultural production (such as horticulture).

Farmers cannot join this scheme if the value of their non-farming activities is above the VAT registration threshold (currently £85,000). The amount of VAT paid on business expenses becomes irrelevant to VAT returns.

The scheme was introduced to help ease the administrative burden on farmers who found that the requirement to maintain full VAT records had become disproportionally burdensome, usually by reason of the relatively small size of their businesses.

It is a condition of joining the scheme that farmers who are registered for VAT must have their registration cancelled. The flat rate scheme is effectively an alternative to VAT registration for farmers. However, although the farmers will no longer be able to reclaim input tax they can charge a flat rate addition (FRA) currently 4%.

The FRA is not VAT and the farmer is allowed to keep it. The addition acts as compensation for the loss of input tax the farmer would have been able to reclaim if registered for VAT.

Source: HM Revenue & Customs Wed, 24 Feb 2021 00:00:00 +0100

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Some accountancy websites also provide pages and pages of tax information, helpsheets, etc. We prefer to give clients personally tailored advice. So, if you want details of tax rates and allowances just go to the HMRC website on which you should find what you’re looking for. If you need more individual advice please contact us.

Below are links to websites you may find of interest, but as we like to support our local community and clients, we have included links to websites that may be of interest:

HMRC
FT
BBC
VEALE WASBROUGH VIZARDS
CESP
PRACTICE INDEX
SIMCOMM ACADEMY

More Local:
FOOTPLATE EXPERIENCE
ANGLEBURY PRESS
OFFCAMBER.CO.UK