Updated VAT agricultural flat rate scheme notice
HMRC have updated Notice 700/46 entitled ‘Agricultural Flat Rate Scheme’. The notice cancels and replaces the previous version published in January 2002 and any subsequent updates issued by HMRC.
Businesses that use the flat rate scheme pay VAT as a fixed percentage of their VAT inclusive turnover. The Agricultural Flat Rate Scheme is a variant of the flat rate scheme specifically designed for farmers and other activities relating to agricultural production (such as horticulture). Farmers cannot join this scheme if the value of their non-farming activities is above the VAT registration threshold. The amount of VAT paid on business expenses becomes irrelevant to your VAT returns.
The new guidance includes information on:
- How to join the scheme
- Definitions of farming activities
- Non-farming activities (e.g. the provision of holiday accommodation)
- How the scheme works
- Making imports & exports
- How to leave the scheme
HMRC have also made some changes to improve the layout and clarity of the notice.