Whether the flat rate scheme will benefit your business depends on its VAT profile. One of the principal claims is that the flat rate scheme will reduce administration. While there will probably be some administrative time saved - the VAT requirements are less onerous, for example - a business will still need to keep good records for accounting purposes.
From a financial point of view, the scheme may result in a business paying less VAT than under the normal rules, but there are a number of pitfalls such as the requirement to pay the flat-rate on income which is exempt from normal VAT. Even if it increases the VAT payable, you may feel the administrative time saving is worth the extra. Before opting into the new scheme, we advise you to compare the situation for the previous 12 months with what it would have been under the flat rate scheme.
Since 1 April 2017 the scheme has become much less attractive for labour intensive businesses such as consultants. A new flat-rate of 16.5% has been introduced for businesses which spend relatively little on goods, which almost always makes the scheme less financially attractive than ordinary VAT accounting.
Other schemes are also available to some businesses, such as cash or annual VAT accounting. These should also be considered.