What is the maximum taxable turnover (excluding VAT) to join the flat rate scheme?

The flat rate scheme in the UK is designed to simplify VAT reporting for small businesses by allowing them to pay a fixed percentage of their turnover as VAT rather than calculating VAT on each sale and purchase. To be eligible for this scheme, a business must have a maximum taxable turnover of £150,000 excluding VAT in the previous 12 months.

This threshold is significant because it ensures that the flat rate scheme is utilized by smaller businesses, which can benefit from simplified compliance and reduced administrative burden. If a business exceeds this turnover limit, it can no longer use the scheme and must revert to the standard VAT accounting scheme, where they will need to track VAT on sales and purchases more rigorously.

Understanding these thresholds is essential for businesses intending to choose the best VAT accounting scheme based on their turnover and operational needs.