What is the VAT Flat Rate Scheme and should I use it?

The Flat Rate Scheme lets you pay VAT as a fixed percentage of your gross turnover (the percentage depends on your trade sector) instead of working out the difference between VAT charged and VAT reclaimed on every transaction, which can simplify your bookkeeping. However, you generally can't reclaim VAT on most purchases under this scheme, so whether it saves you money depends heavily on your costs and how much VAT-able expenditure you have. It suits some low-cost-base service businesses well but not others, so it's genuinely worth running the numbers with an accountant before switching.