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Pre Budget 2008 changes

I use cash accounting in a small business turning over about £130,000 net of VAT per annum.  Apart from the reduction in the standard rate of VAT from 17.5% to 15% are there any other changes that may affect me? 

There was a change to the Flat Rate scheme whereby the limit to join is set at no more than £150,000 of taxable turnover (which is all of your VAT rated sales except for exempt supplies).  This is a change from the old method of including an additional test to ensure that your total business income (which includes exempt supplies) also does not exceed £187,500. 

The vast majority of the  percentages used have decreased slightly to take into account the standard rate deduction.  With the decreased rates and the opportunity to take advantage the additional one point reduction in the first year, this may well be a good opportunity to apply for flate rate treatment. 

 

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