The Chancellor announced new changes to the VAT Flat Rate Scheme in his recent Autumn statement, which will take effect from 1 April 2017.
In summary, at least 2% (or £1,000) of your VAT inclusive income within a period must be spent on business expenditure in the form of goods. Failing to meet this criteria will result in you being classed as a "limited cost trader" and suffering a higher Flat Rate percentage at 16.5%.
This percentage will result in no financial advantage being gained by remaining on the Flat Rate Scheme. It is likely to be more appropriate to transfer to the VAT Cash Scheme, however this will involve changing the way that the records are maintained and ensuring that VAT receipts are provided for all relevant expenses.