There is an extra 1%, your flat rate is 1% less, in the first year.
The retained figure is added to your sales and is subject to either Corporation Tax or Income Tax, as applicable.
You claim no other VAT except when you buy business equipment, including commercial vehicles, costing more than £2,000 when you can claim back this VAT specifically.
Preparation of VAT forms is more simple.
You need to monitor whether it continues to be beneficial to stay in the scheme.
You need to come out of the scheme if your sales, excluding VAT, exceed £150,000 in a year.
Contact us if you wish to register for the VAT flat rate scheme or for general VAT and tax advice