IoM Increases VAT Flat Rate Scheme Rate
by Jason Gorringe, Lowtax.net, London
04 April, 2017
The Isle of Man has announced changes to the VAT Flat Rate Scheme that will see businesses with "limited costs" paying a higher flat rate.
The VAT Flat Rate Scheme is a simplified accounting scheme, which allows small businesses to apply a fixed flat-rate percentage to gross turnover to arrive at the VAT due.
From April 1, 2017, limited cost businesses – one where the cost of its goods is below two percent of turnover or below GBP1,000 (USD1,254) per year – will pay an increased flat rate of 16.5 percent on their VAT inclusive turnover, in line with changes introduced in the UK's recent budget.
The changes only affect limited cost businesses, and the existing flat rates will continue to be available for those flat rate businesses that do not qualify as a limited cost business.
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