Within the Autumn Statement, delivered on the 23 November 2016, it was announced that a new 16.5% rate will be introduced within the Flat-Rate Scheme aimed at businesses with limited costs.

This new percentage will come into effect on 1^st April 2017 and will require traders to perform an additional test to confirm if they qualify as a limited cost trader. For these purposes, a limited cost trader will be defined as one whose gross expenditure on goods is either less than 2% of their VAT inclusive turnover for that prescribed accounting period or, for the same period, greater than 2% of VAT inclusive turnover but less than £1000 per annum. In addition, this test must be performed for every prescribed accounting period and if a business meets this criteria they will be required to apply the new Flat-Rate percentage.