VAT Flat Rate Scheme Update

[oliverson]

Up until now, I've always been happy being in the FRS. Money for old rope and very convenient. However, being in it I've actually been LOSING MONEY because my travel and expenses whilst contracting in London (I live in the north) are significant, i.e. around £ 24k per annum. So, that's £ 4,800 right there vs retaining c. £ 3,500 on the scheme!!

However, there is a downside aside from the added paperwork. I usually share a flat with another professional with the landlord not being VAT registered. Finding one that is would reduce my options and so I'm resigned to the fact I may have to move across to hotels, albeit rather nice ones.

[css_jay99]

If YourCo purchases the phone or the computer equipment and has a valid VAT invoice in its name then it can reclaim the VAT. If the phone contract is in the company name it can also reclaim a proportion of the VAT, adjusted for any personal/private use element. You don't need to apportion the VAT on the cost of the handset or any fixed charges though.

Neither cap ex or accounting fees count. There's a list up there ^^^ somewhere.

You can reclaim the VAT on this expenditure but it doesn't count toward the 2%. These are easily, and often, confused.

mixed opinions....

Talking about Standard VAT scheme btw

Intouch's guide says VAT on capital Expenditure is not reclaimable


if not claimable, I will most likely be better off under FRS

[FrontEnder]

However, there is a downside aside from the added paperwork. I usually share a flat with another professional with the landlord not being VAT registered. Finding one that is would reduce my options and so I'm resigned to the fact I may have to move across to hotels, albeit rather nice ones.

Why would you have to use hotels?

If the landlord isn't vat registered, it just means you can't reclaim VAT - if you're saving loads by using a flat it does't make much sense to pay more for hotels just so you can claim back the VAT.

[oliverson]

Why would you have to use hotels?

If the landlord isn't vat registered, it just means you can't reclaim VAT - if you're saving loads by using a flat it does't make much sense to pay more for hotels just so you can claim back the VAT.

I'm not incurring more expenses. The £ 12k I'm currently paying for accommodation has no VAT element but if I spent that £ 12k on hotels and I came out of the FRS then I'd be able to claim the VAT back on that = £ 2,400.

Incidentally, I just spoke to a letting agent regarding Company Lets. Has anybody got any experience of this? Entertaining the idea of taking out a company let, claiming the VAT back on it and subletting one of the rooms to somebody else.

[TheCyclingProgrammer]

I asked this in some thread but didn't see a reply: does capital expenditure count towards your 2%/£1 threshold for FRS?

Just today one of my monitors suddenly died and I could do with a new laptop. If I spend a grand on those things, and my other VAT-able expenses are minimal (basically accountancy fees) am I a)able to stay FRS b)better off doing so?

Capital expenditure does not count for the FRS low cost trader test.

[TheCyclingProgrammer]

mixed opinions....

Talking about Standard VAT scheme btw

Intouch's guide says VAT on capital Expenditure is not reclaimable


if not claimable, I will most likely be better off under FRS

There are no mixed opinions. You're confusing two different things or I misunderstood you.

For the purposes of the low cost trader test and determining your FRS rate, capital expenditure does not count.

I assumed you were asking if you can reclaim the VAT on these things if you move on to the standard scheme, which you can.

You're looking at InTouch's FRS guide. You cannot reclaim VAT on the FRS on capital purchases unless they are more than £2k in total in a single purchase.

[radish2008]

So I got my letter today and it doesn't say anything about accommodation being excluded ?

Is this right ?

If I spend £2k a year on hotels I would be better off out of the FRS ?

[SueEllen]

So I got my letter today and it doesn't say anything about accommodation being excluded ?

Is this right ?

If I spend £2k a year on hotels I would be better off out of the FRS ?

Is a hotel stay a good? Is it a tangible object?

Then you can answer your questions yourself.

[TheCyclingProgrammer]

For something that's actually quite simple, its amazing how many threads we've had about this. People asking the same questions again and again...

[oliverson]

So, stationery it is then. If I bought this block and divi'd them up, who'd be interested?

GB QV PENNY BLACK 1840 Plate 8 A MAGNIFICENT BLOCK OF EIGHT SG 1 RARELY SEEN | eBay


Can you imagine your accountants face when you allocate £ 2k for stamps?
:-D