VAT Scheme CompareFarm 67
VAT Scheme Compare · HMRC guidance reviewed 6 August 2026

First-year VAT discount: the 1 percentage-point window

Apply the discount only during the first year after VAT registration and to the rate otherwise applicable.

Decision boundary

The discount is one percentage point, not 1% of the payment. Confirm the VAT-registration anniversary and split a return period if the applicable rate changes.

Evidence to check

Compare this VAT period

Official source

GOV.UK: first-year discount

General information only. HMRC decides scheme eligibility, rate and leaving dates.

Related guides

VAT Flat Rate calculator: use VAT-inclusive turnoverApply the selected HMRC rate to VAT-inclusive turnover and keep standard-accounting inputs separate.Limited cost business test: 2% and £1,000 rulesTest relevant goods against both HMRC limits for each VAT return period instead of self-classifying once.Flat Rate vs standard VAT: compare the same periodCompare cash paid to HMRC without treating the lower estimate as proof that a scheme is suitable or available.

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