finance.tax.vat-flat-rate

export function flatRateVat(turnover: Money, sector: string, limitedCostBusiness: boolean, registrationDate: string | null, supplyDate: string): FlatRateVat

/** The rate that applied and the VAT it gives. */
export interface FlatRateVat {
  readonly sector: string;
  readonly limitedCostBusiness: boolean;
  /** whether the 1% first-year reduction was taken off */
  readonly firstYearReduction: boolean;
  /** the flat rate applied, after any reduction */
  readonly basisPoints: number;
  /** turnover at the flat rate, rounded half-up to the penny */
  readonly vatDue: Money;
}

import { flatRateVat } from "#fune/finance.tax.vat-flat-rate@^1";

import { addDays } from "./dates_add_days.ts";  ← from dates.add-days ^1.0.0 · built alongside by fune
import { addMonths } from "./dates_add_months.ts";  ← from dates.add-months ^1.0.0 · built alongside by fune
import { type Money, money } from "./money_amount.ts";  ← from money.amount ^1.0.0 · built alongside by fune
import { applyRate } from "./money_apply_rate.ts";  ← from money.apply-rate ^1.0.0 · built alongside by fune
import { FLAT_RATES, FLAT_RATES_HISTORY } from "./finance_tax_vat_flat_rate_data.ts";  ← this capability’s own data, compiled from data/flat-rates.json into the same file by fune build
import { type FlatRateVat } from "./finance_tax_vat_flat_rate_types.ts";

const LIMITED_COST = "limited-cost-business";

function rateOn(sector: string, onDate: string): number {
  const rows = FLAT_RATES.filter((r) => r.sector === sector);
  for (const row of rows) {
    if (onDate >= row.validFrom && (row.validTo === null || onDate <= row.validTo)) return row.basisPoints;
  }
  if (FLAT_RATES_HISTORY !== "full" && rows.length > 0) {
    const earliest = rows.map((r) => r.validFrom).reduce((a, b) => (b < a ? b : a));
    if (onDate < earliest) {
      throw new RangeError(
        `no flat rate for ${sector} on ${onDate}: this build was installed with history=${FLAT_RATES_HISTORY}, so it only carries rates from ${earliest}. Reinstall with history=full for older periods.`,
      );
    }
  }
  throw new RangeError(`no flat rate for ${sector} on ${onDate}`);
}

/**
 * VAT due under the Flat Rate Scheme on a slice of VAT-inclusive turnover.
 *
 * The rate is the one in force on the supply date; the first-year reduction
 * runs to the day before the first anniversary of registration.
 */
export function flatRateVat(
  turnover: Money,
  sector: string,
  limitedCostBusiness: boolean,
  registrationDate: string | null,
  supplyDate: string,
): FlatRateVat {
  if (turnover.currency !== "GBP") {
    throw new RangeError(`the flat rate scheme is for GBP turnover, received ${turnover.currency}`);
  }
  addDays(supplyDate, 0);
  if (sector === LIMITED_COST || !FLAT_RATES.some((r) => r.sector === sector)) {
    throw new RangeError(`unknown flat rate sector "${sector}"`);
  }
  const base = rateOn(limitedCostBusiness ? LIMITED_COST : sector, supplyDate);

  let reduced = false;
  if (registrationDate !== null) {
    if (supplyDate < addDays(registrationDate, 0)) {
      throw new RangeError(`supply date ${supplyDate} is before the VAT registration date ${registrationDate}`);
    }
    reduced = supplyDate < addMonths(registrationDate, 12);
  }
  const basisPoints = reduced ? Math.max(base - 100, 0) : base;
  return {
    sector,
    limitedCostBusiness,
    firstYearReduction: reduced,
    basisPoints,
    vatDue: money(applyRate(turnover, basisPoints, "half-up").minor, "GBP"),
  };
}

Install

fune build

With that line in your source, in a TypeScript project (language typescript in fune.project), fune build resolves it and its 4 dependencies, pins them in fune.lock, downloads only the TypeScript package of each, and builds the code above into your project’s .fune/build, one readable file per capability with a header linking back here. Or pin a range in fune.project and build in one step:

fune add finance.tax.vat-flat-rate

The manifest, vectors and README with only the TypeScript implementation. Install it without the registry with fune add ./finance.tax.vat-flat-rate-1.0.0-typescript.fune, or fetch it from a terminal with fune pull finance.tax.vat-flat-rate@1.0.0:typescript.

The whole function, every language, is one file too: finance.tax.vat-flat-rate-1.0.0.fune, 37,466 bytes, sha256 130d7218e0fa3eabb3d522d1d9aad759474a9875b55f362c48d04f35cf78e34e. It installs into a project of any language.

// fune: before finance.tax.vat-flat-rate

// fune: after finance.tax.vat-flat-rate

// fune: replace dates.add-days in finance.tax.vat-flat-rate
// fune: replace dates.add-months in finance.tax.vat-flat-rate
// fune: replace money.amount in finance.tax.vat-flat-rate
// fune: replace money.apply-rate in finance.tax.vat-flat-rate

// fune: step finance.tax.vat-flat-rate after <n|label>

More from the author

**First-year reduction.** In the first year of VAT registration 1 percentage point comes off the flat rate "until the day before your first anniversary of becoming VAT registered" (para 4.7), including off the limited cost rate (the Notice's Example 1: 16.5% becomes 15.5%). Pass the registration date when the business is entitled to it and null when it is not (registering late, or more than a year before joining the scheme, loses it). A supply date before the registration date is an error. The reduction cannot take a rate below 0%: the 0% hotel rate of 2020-21 stays 0%.

**Rate changes inside a period.** Notice 733 para 4.12 requires two calculations when a rate changes during a VAT period; call this once for each part of the turnover. The same goes for a period that straddles the end of the first year.

**Rounding.** The VAT due is the turnover times the rate, rounded half-up to the penny once. Notice 733 does not state a rounding rule; this should be confirmed by a VAT adviser. Negative turnover (credit notes) gives negative VAT.

## Data and sources

- Sector rates: HMRC, "VAT Flat Rate Scheme: how much you pay", https://www.gov.uk/vat-flat-rate-scheme/how-much-you-pay, read on 23 September 2026, including the temporary hospitality rates: catering 4.5% and hotels 0% and pubs 1% from 15 July 2020 to 30 September 2021, then 8.5%, 5.5% and 4% to 31 March 2022. - The current table dates from 4 January 2011, when it was substituted by SI 2010/2940 with the rise of VAT to 20% (VAT Regulations 1995, reg 55K, https://www.legislation.gov.uk/uksi/1995/2518/regulation/55K). Earlier rates are not included, so a supply date before 4 January 2011 is refused. - Limited cost business rate and first-year reduction: VAT Notice 733, "Flat Rate Scheme for small businesses", paras 4.4, 4.7 and 4.12, https://www.gov.uk/guidance/flat-rate-scheme-for-small-businesses-vat-notice-733--2 - Reg 55K on legislation.gov.uk also lists "Dealing in waste or scrap" at 10.5%, which gov.uk's table does not; it is left out until confirmed.

Sector keys are HMRC's sector names in lower case with punctuation turned into hyphens ("Retailing food, confectionery, tobacco, newspapers or children's clothing" is `retailing-food-confectionery-tobacco-newspapers-or-childrens-clothing`). When a rate changes, publish a new version with a new row. The data declares its effective dates, so a `history=current` build refuses older supply dates with an explanation instead of answering them at today's rate.

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