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Information Sheet 17/03, December 2003

This Information Sheet explains changes to the VAT Flat Rate Scheme (FRS)

1 Changes to the VAT Flat Rate Scheme (FRS)

1.1 What's this information sheet about?

In his Pre-Budget Report the Chancellor of The Exchequer announced, changes to the FRS to make it more attractive to business. This information sheet explains those changes.

1.2 What are the changes to the FRS?

The changes are—

1. Ìý

   —ÌýÌýÌýÌý Lower rates for all sectors, with an average reduction of about 1 per cent. This reflects experience of the scheme to date.

2. Ìý

   —ÌýÌýÌýÌý A further reduction of 1 per cent off the normal flat rates for businesses in their first year of VAT registration. This recognises the special circumstances of newly VAT-registered businesses and will encourage them to use FRS from the beginning of their VAT registration.

3. Ìý

   —ÌýÌýÌýÌý An online ready reckoner so that you can check the benefits for yourself. FRS will not suit everyone, but the ready reckoner at www.hmce.gov.uk