The VAT Flat Rate scheme offers good savings to many small businesses – savings of time and, often, VAT payments to HMRC.
However watch for the trap that if a entity using the FRS has other income outside of the business it can fall into the FRS accidentally. EG If you are a sole trader using FRS and you let out your home then, although normally a residential property let, be it your home or a buy to let, would be VAT exempt, under FRS rules it has to be included in your FRS turnover and you pay VAT on the rent.
The simple solution to this is to make sure that there are no other income bearing assets in the same ownership as the vat registration, eg if you’re vat registered personally own any let properties jointly with a spouse/partner, or if you are in a partnership own any properties personally.
Some simple planning here can save a lot of worry later.