»Ê¹ÚÌåÓýapp

An overview is given in . You should bear in mind the following policy principles when dealing with queries about the scheme:

• »Ê¹ÚÌåÓýapp scheme calculates net tax by reference to flat rate percentages. Those flat rate percentages are simply a short cut to calculating net tax and are not “rates of VAT.â€� That is why FRS users issue invoices for the normal VAT rate for the supply.
• »Ê¹ÚÌåÓýapp scheme does not negate a businessâ€� ‘right to deductâ€� input tax, as the flat rate percentages have an allowance for input tax built into them. »Ê¹ÚÌåÓýapp flat rate scheme simply removes the need to calculate output tax and input tax separately.
• »Ê¹ÚÌåÓýapp FRS is a ‘special scheme for small undertakingsâ€� and operates under a special provision of Council Directive 2006/112/EC (Article 281). It must be revenue neutral in its application across the board, although individual businesses may be “winnersâ€� or “losersâ€�. However, the scheme remains valid because the flat rate percentages are set to provide tax neutrality across the eligible population.