F5PART VIIAFLAT-RATE SCHEME FOR SMALL BUSINESSES

Annotations:
Amendments (Textual)

Interpretation of Part VIIA55A

1

In this Part—

  • F3...

  • “capital expenditure goods” means any goods of a capital nature but does not include any goods acquired by a flat-rate trader (whether before he is a flat-rate trader or not)—

    1. a

      for the purpose of resale or incorporation into goods supplied by him,

    2. b

      for consumption by him within one year, or

    3. c

      to generate income by being leased, let or hired;

  • F6...

  • F2“EDR” means the day with effect from which a person is registered under the Act;

  • “end date” has the meaning given in regulation 55Q(2);

  • “flat-rate trader” means a person who is, for the time being, authorised by the Commissioners in accordance with regulation 55B(1);

  • “relevant purchase” has the meaning given in regulation 55C;

  • “start date” has the meaning given in regulation 55B(2);

  • “the scheme” means the flat-rate scheme for small businesses established by this Part;

  • “the Table” means the table set out in regulation 55K.

2

For the purposes of this Part, a person is associated with another person at any time if that other person makes supplies in the course or furtherance of a business carried on by him, and—

a

the business of one is under the dominant influence of the other, or

b

the persons are closely bound to one another by financial, economic and organisational links.

F13

For the purposes of this Part, “relevant date”, in relation to a flat-rate trader, means any of the following—

a

his start date;

b

the first day of the prescribed accounting period current at any anniversary of his start date;

c

any day on which he first carries on a new business activity;

d

any day on which he no longer carries on an existing business activity;

e

any day with effect from which the Table is amended in relation to him;

f

where regulation 55JB (reduced rate for newly registered period) applies—

i

the day that his newly registered period begins, and

ii

the first anniversary of his EDR.

F44

For the purposes of this Part, “limited-cost trader” is a flat-rate trader whose expenditure on relevant goods in any prescribed accounting period, together with any VAT chargeable on that expenditure, is less than the specified amount, and—

a

“relevant goods” are goods used or to be used by a flat-rate trader exclusively for the purposes of the trader’s business but excluding the following—

i

vehicles, vehicle parts and fuel except where the category of business applicable to the flat-rate trader in the Table is, in that prescribed accounting period, “Transport or storage, including couriers, freight, removals and taxis” and the flat-rate trader owns or leases a vehicle for that business;

ii

food or beverages for consumption by the flat-rate trader or employees of the flat-rate trader;

iii

capital expenditure goods;

iv

goods for the purpose of resale, leasing, letting or hiring out except where the main business activity of the flat-rate trader ordinarily consists of selling, leasing, letting or hiring out such goods;

v

goods for disposal as promotional items, gifts or donations;

b

“specified amount” is the higher of—

i

2 per cent of the trader’s relevant turnover in the prescribed accounting period; and

ii

where the prescribed accounting period is one year, £1000, and, in any other case, such proportion of £1000 as the length of the accounting period bears to the period of one year.