finance.tax.vat-flat-rate Unreviewed

def flat_rate_vat(turnover: Money, sector: str, limited_cost_business: bool, registration_date: Optional[str], supply_date: str) -> FlatRateVat

@dataclass(frozen=True)
class FlatRateVat:
    """The rate that applied and the VAT it gives."""

    sector: str
    limited_cost_business: bool
    #: whether the 1% first-year reduction was taken off
    first_year_reduction: bool
    #: the flat rate applied, after any reduction
    basis_points: int
    #: turnover at the flat rate, rounded half-up to the penny
    vat_due: Money

from fune.finance.tax.vat_flat_rate import flat_rate_vat  # finance.tax.vat-flat-rate@^1

from typing import Optional

from .dates_add_days import add_days  ← from dates.add-days ^1.0.0 · built alongside by fune
from .dates_add_months import add_months  ← from dates.add-months ^1.0.0 · built alongside by fune
from .finance_tax_vat_flat_rate_data import FLAT_RATES, FLAT_RATES_HISTORY  ← this capability’s own data, compiled from data/flat-rates.json into the same file by fune build
from .finance_tax_vat_flat_rate_types import FlatRateVat
from .money_amount import Money, money  ← from money.amount ^1.0.0 · built alongside by fune
from .money_apply_rate import apply_rate  ← from money.apply-rate ^1.0.0 · built alongside by fune

_LIMITED_COST = "limited-cost-business"


def _rate_on(sector: str, on_date: str) -> int:
    rows = [r for r in FLAT_RATES if r.sector == sector]
    for row in rows:
        if on_date >= row.valid_from and (row.valid_to is None or on_date <= row.valid_to):
            return row.basis_points
    if FLAT_RATES_HISTORY != "full" and len(rows) > 0:
        earliest = min(r.valid_from for r in rows)
        if on_date < earliest:
            raise ValueError(
                "no flat rate for %s on %s: this build was installed with history=%s, so it only carries rates from %s. "
                "Reinstall with history=full for older periods." % (sector, on_date, FLAT_RATES_HISTORY, earliest)
            )
    raise ValueError("no flat rate for %s on %s" % (sector, on_date))


def flat_rate_vat(
    turnover: Money,
    sector: str,
    limited_cost_business: bool,
    registration_date: Optional[str],
    supply_date: str,
) -> FlatRateVat:
    """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.
    """
    if turnover.currency != "GBP":
        raise ValueError("the flat rate scheme is for GBP turnover, received %s" % (turnover.currency,))
    add_days(supply_date, 0)
    if sector == _LIMITED_COST or not any(r.sector == sector for r in FLAT_RATES):
        raise ValueError('unknown flat rate sector "%s"' % (sector,))
    base = _rate_on(_LIMITED_COST if limited_cost_business else sector, supply_date)

    reduced = False
    if registration_date is not None:
        if supply_date < add_days(registration_date, 0):
            raise ValueError(
                "supply date %s is before the VAT registration date %s" % (supply_date, registration_date)
            )
        reduced = supply_date < add_months(registration_date, 12)
    basis_points = max(base - 100, 0) if reduced else base
    return FlatRateVat(
        sector=sector,
        limited_cost_business=limited_cost_business,
        first_year_reduction=reduced,
        basis_points=basis_points,
        vat_due=money(apply_rate(turnover, basis_points, "half-up").minor, "GBP"),
    )

Install

fune build

With that line in your source, in a Python project (language python in fune.project), fune build resolves it and its 4 dependencies, pins them in fune.lock, downloads only the Python 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 Python implementation. Install it without the registry with fune add ./finance.tax.vat-flat-rate-1.0.1-python.fune, or fetch it from a terminal with fune pull finance.tax.vat-flat-rate@1.0.1:python.

The whole function, every language, is one file too: finance.tax.vat-flat-rate-1.0.1.fune, 39,155 bytes, sha256 8732114a4b9325f0257d3e3481a85f460a71b16a8c4f8260f2fb63c2ae0a7819. 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.

## Before you rely on this

**Not professional advice.** This capability calculates tax figures from published rules. It is a software component for developers, not tax advice. Rules change and every rate here has an effective date. Check that the dates cover your case. Verify results against the official sources listed above, and have a chartered accountant or tax adviser review how you use it, before anyone relies on the output. Provided "as is" under its licence, without warranty.

**Unreviewed.** This capability's implementations agree in every language and pass its published test vectors, which were worked out from the official sources cited. But no qualified chartered accountant or tax adviser has yet checked those vectors, or confirmed that the capability covers the cases it claims. Treat it as a draft. Do not use it for real people, money or decisions without your own expert review. Once a qualified reviewer signs off, this notice is replaced with their name, qualification and the date. Each new version needs fresh sign-off.

## Notices

Contains public sector information licensed under the Open Government Licence v3.0 (https://www.nationalarchives.gov.uk/doc/open-government-licence/version/3/).

Legislation: Crown copyright and database right.

1.0.1 marks it unreviewed and adds its attribution notices (NOTICE). The code and the tests are unchanged.

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