Flat rate VAT changes for small businesses
Thread poster: Ata Arif

Ata Arif  Identity Verified
United Kingdom
Local time: 17:55
Member (2009)
Kurdish to English
+ ...
Mar 11

Dear All
For more than a decade many small businesses enjoyed the benefit of flat VAT Rate.
As now I am thinking of joining the scheme voluntarily, things changed, Not very good luck!
as you are aware, from the 1st of April 2017 the flat rate will become %16.5 for business which are classified as: "limited cost traders".
my question is that, for translators and especially interpreters they mostly spend more than £1000 on fuel and vehicles, and that is by all means should be counted as "Business Expenses".
however, my accountant says that:
However, from 1st April 2017, HMRC has introduced another 16.5% flat rate to be applied by all businesses which have costs (excluding wages) of less than 2% of turnover, or £1,000 a year. (Bearing in mind that on that calculation will be excluded all fuel costs, repair and maintenance, and any other travel/accommodation costs).

when I asked: why and what is counted as business costs, here was his reply:

If you buy stuff for the business, like stationery, equipment, or VAT on rent, etc.

now I am confused as why my transport costs are not counted as business expenses while I cannot perform face to face interpreting at any locations unless I travel by car or whatever means which cost me money!
any suggestions or legal/professional opinion which supports my view or my accountant's please.
Thank you


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Sheila Wilson  Identity Verified
Spain
Local time: 17:55
Member (2007)
English
+ ...
Home office Mar 11

Ata Arif wrote:
now I am confused as why my transport costs are not counted as business expenses while I cannot perform face to face interpreting at any locations unless I travel by car or whatever means which cost me money!

That's one that seems logical to me. You presumably (like most of us) have a home office i.e. you don't need to travel to your habitual place of work. When you have an interpreting assignment, your client should be paying for your displacement, surely. If it's a rail ticket or something then that's clear-cut - they pay for the ticket - but if you're using your car then you need to charge them per mile, or for your travelling time, or whatever. Of course, you could just incorporate it in your hourly rate instead.


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Flat rate VAT changes for small businesses

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