Flat rate scheme (FRS) ― eligibility, joining and leaving the scheme

Produced by a Tolley Value Added Tax expert

Value Added Tax

Guidance

This guidance note sets out the eligibility conditions that must be met for a person to join and stay in the flat rate scheme (FRS). It also covers the process for joining and leaving the FRS.

For an overview of the FRS more broadly, see the Flat rate scheme (FRS) ― overview guidance note.

See also De Voil Indirect Tax Service V2.199B.

Eligibility to join the FRS

To be eligible to join the flat rate scheme (FRS), a trader must meet certain conditions. The conditions can conveniently be divided into the following categories:

•
level of turnover
•
offences / penalties
•
group / divisional registration and associated persons
•
use of other VAT schemes
•
other exclusions

VATA 1994, s 26B(4)

Level of turnover

To join the FRS, there must be grounds for believing that the value of taxable supplies in the next year will not exceed £150,000 excluding VAT.

The relevant turnover is therefore the VAT exclusive (or net) value of supplies made at the

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