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I'm thinking of registering for UK VAT under the Flat Rate…

I'm thinking of registering for...
I'm thinking of registering for UK VAT under the Flat Rate Scheme. It says I'll be charged 7.5% of sales, but that my VAT expenses can't be deducted. I'm an overseas seller and import products into the UK, where they are sold through an online marketplace. When I import products, there's a 20% VAT charge and 2.5% duty assessed at customs. Will they continue to assess the 20% VAT and 2.5% duty at customs if I'm registered with the Flat Rate Scheme? If so, then just to clarify, does that mean I would pay 30% total (20% VAT at customs, 2.5% duty at customs, and 7.5% VAT when I file my return)?
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Answered in 9 hours by:
10/11/2017
bigduckontax
bigduckontax, Accountant
Category: UK Tax
Satisfied Customers: 5,230
Experience: FCCA FCMA CGMA ACIS
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Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.

Correct, the one disadvantage of the flat rate scheme is that although you add a lower percentage to your invoices you cannot reclaim input tax save when capital items are purchased for the business. If your imports are substantial then the VAT imposed by Customs at 20% will form part of your Cost of Sales and not recoverable any other way.

I do hope that you have found my reply of assistance.

bigduckontax
bigduckontax, Accountant
Category: UK Tax
Satisfied Customers: 5,230
Experience: FCCA FCMA CGMA ACIS
Verified
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