PARLIAMENTARY WRITTEN QUESTION
VAT (13 March 2017)

Following the Chancellor's announcement at Autumn Statement 2016, details of the new measure, draft legislation and a supporting technical note were placed on GOV.UK for an 8 week consultation period. At the beginning of January, HM Revenue and Customs (HMRC) contacted business representative bodies, to discuss the change and ask for their feedback. Changes were made to the legislation and guidance in response to this feedback.

At the end of February, HMRC delivered an online calculator to help businesses work out whether they have limited costs. This provides a link to the updated VAT Notice 733, where the changes are explained in more detail. These products were developed using feedback from businesses using the scheme and their agents. They were made available once the changes to the legislation were agreed to help businesses get ready for the change.

Once the flat rate change takes effect, businesses who have not already used these tools will be able to link to these products when registering for VAT or when completing a VAT return on line.

During March, HMRC will contact all flat rate businesses by letter and also by email (where an email address is held), advising them of the change and telling them what they need to do next. HMRC began issuing these emails and letters on 10 March.

Many flat rate businesses are represented by an agent. At the beginning of March, HMRC used one of their weekly Agent Talking Point meetings to highlight the changes to the VAT flat rate scheme and provide the opportunity for agents to talk with subject matter experts from HMRC. Agent Talking Points are weekly online digital meetings for tax agents and advisers, and over 1,900 agents attended the flat rate scheme session.