Introduction to this document

Letter withdrawing from flat rate scheme

If you use the flat rate scheme (FRS), you can leave it voluntarily at any time by writing a simple letter to HMRC.


If you operate the FRS, you are free to leave it and change to standard VAT reporting at any time. You might do this if your input tax has increased, meaning the FRS leaves you worse off, or you signed up to the scheme to enjoy VAT savings but the limited cost trader category introduced in 2017 has curtailed them.


To leave the scheme you simply need to write to HMRC and specify the date you are going to cease operating the FRS.

Make sure you stop operating at that date - don’t wait for the confirmation letter to come back.

You can’t backdate leaving, so the earliest date you will be able to choose will be the day after you write the letter, but it is neater and easier from a reporting perspective to choose a date that coincides with the end of a VAT period.That way you aren’t reporting under the FRS for part of a period and under standard reporting for the rest.


Once you leave the FRS, you can’t rejoin it until a period of twelve months has elapsed.