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    Default Submitting VAT return (FRS) - Box 6

    Box 6: your flat rate turnover for the period
    Enter in Box 6 the flat rate turnover - including VAT - that you applied your flat rate percentage to. For example, if your flat rate turnover for the period is 10,000 and your percentage is 8 per cent then you would enter 10,000 in Box 6 and 8 per cent of 10,000 - that is, 800 - in Box 1. Don't forget to include in your flat rate turnover supplies that are exempt from VAT like rent.


    Slightly confused here.

    For eg. Assuming the gross turnover for last quarter is 10k. Adding VAT collected (@17.5%), the total VAT inclusive turnover is 11.75k. The FRS percentage is 12.5%, which will be applied to 10k and hence VAT due would be 1.25k, which goes in Box 1.

    So which figure goes into Box 6? 10k or 11.75k?

    I am leaning towards 10k but slighlty confused by the words 'including VAT'.

    Thanks!

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    Quote Originally Posted by maverick18 View Post
    Box 6: your flat rate turnover for the period
    Enter in Box 6 the flat rate turnover - including VAT - that you applied your flat rate percentage to. For example, if your flat rate turnover for the period is 10,000 and your percentage is 8 per cent then you would enter 10,000 in Box 6 and 8 per cent of 10,000 - that is, 800 - in Box 1. Don't forget to include in your flat rate turnover supplies that are exempt from VAT like rent.


    Slightly confused here.

    For eg. Assuming the gross turnover for last quarter is 10k. Adding VAT collected (@17.5%), the total VAT inclusive turnover is 11.75k. The FRS percentage is 12.5%, which will be applied to 10k and hence VAT due would be 1.25k, which goes in Box 1.

    So which figure goes into Box 6? 10k or 11.75k?

    I am leaning towards 10k but slighlty confused by the words 'including VAT'.

    Thanks!
    You should put in the 10,000 plus VAT - so 11,750. This makes it easy for HMRC to check you're being consistent!

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    Quote Originally Posted by Clare@InTouch View Post
    You should put in the 10,000 plus VAT - so 11,750. This makes it easy for HMRC to check you're being consistent!
    Thanks Clare!

    I've submitted my VAT return.

    In the cofirmation receipt, it says that VAT would be collected on 10th Feb, whereas my due date was 7th Feb.

    Do you think this could be a problem? Why would it take 10 days for HMRC to debit my account?

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    Quote Originally Posted by maverick18 View Post
    Thanks Clare!

    I've submitted my VAT return.

    In the cofirmation receipt, it says that VAT would be collected on 10th Feb, whereas my due date was 7th Feb.

    Do you think this could be a problem? Why would it take 10 days for HMRC to debit my account?
    Don't worry that's normal. When HMRC collect by DD it's often a few days after the due date, presumably the time it takes their DD system to kick in.

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    Quote Originally Posted by Clare@InTouch View Post
    Don't worry that's normal. When HMRC collect by DD it's often a few days after the due date, presumably the time it takes their DD system to kick in.
    Thanks!

    I think I made it just in time ..

    This is for the others out here:

    Direct Debit payments
    If you pay by online Direct Debit, HMRC will collect payment from your nominated bank account a further three bank working days after the extended due date for your return. This means that online VAT Direct Debit offers you more time to pay than any other method - a minimum of ten extra calendar days.

    Therefore, the deadline for quarter ending 31st Dec is 10th Feb (for those paying thru Direct Debit).

    However, DD must be set up before the return and at least five banking days before the payment collection date. This allows HMRC time to make the necessary arrangements with your bank or building society.


    Further guidace:
    HM Revenue & Customs: Deadlines for your VAT Return and payment

    Cheers!

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    For eg. Assuming the gross turnover for last quarter is 10k. Adding VAT collected (@17.5%), the total VAT inclusive turnover is 11.75k. The FRS percentage is 12.5%, which will be applied to 10k and hence VAT due would be 1.25k, which goes in Box 1.
    Some slight confusion here. To calculate the FRS VAT payable, you first calculate turnover including VAT, then apply the FRS percentage to that number.

    Using current rates for IT contractors, that is 20% charged to the client and 14.5% returned to HMRC, if your sales figure for the quarter was 10K then you would calculate VAT return as

    Turnover = 10,000
    VAT charged = 2,000
    VAT Inclusive turnover = 12,000

    VAT owed = 12,000 * 14.5% = 1740

    There's a calculator here Try putting in 48K (10k * 4 * 1.2) as your estimated VAT inclusive turnover for the year, and leaving the other fields blank. It gives FRS VAT as 6,960 (=1,740 * 4) and 'standard' VAT as 2,000.
    Last edited by pjclarke; 31st January 2011 at 13:04.
    The Pygmy Shrew of Wall St.

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    Quote Originally Posted by pjclarke View Post
    Some slight confusion here. To calculate the FRS VAT payable, you first calculate turnover including VAT, then apply the FRS percentage to that number.

    Using current rates for IT contractors, that is 20% charged to the client and 14.5% returned to HMRC, if your sales figure for the quarter was 10K then you would calculate VAT return as

    Turnover = 10,000
    VAT charged = 2,000
    VAT Inclusive turnover = 12,000

    VAT owed = 12,000 * 14.5% = 1740

    There's a calculator here Try putting in 48K (10k * 4 * 1.2) as your estimated VAT inclusive turnover for the year, and leaving the other fields blank. It gives FRS VAT as 6,960 (=1,740 * 4) and 'standard' VAT as 2,000.
    Thank you for this mate.

    It only means that I've put in an incorrect VAT number

    Need to get in touch with HMRC and get it rectified

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    I believe that if the difference is under 2K, then you don't need to do anything - just adjust it on the next return, but keep clear records so that you can show what you have done in case of an audit.

    Also the recent change makes things a bit awkward. The flat rate should be based upon the headline rate for each invoice, so you may need to do two sets of calculations - one for the 17.5% invoices - and one for the 20% invoices - and them sum the two together.

    HMRC are reasonably relaxed about genuine VAT errors, particularly when changes in rates occur. But it's still important to make sure you put in the effort to get it right - and make appropriate corrections in the right timescale.

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    Thank you all.

    I spoke on the VAT helpline and they said I can adjust it in the next VAT return submitted.

    However, I've written to the Error Correction team and let them know about the error and whether its possible to pay the difference before the next return.

    Cheers!

  10. #10

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    Quote Originally Posted by centurian View Post
    I believe that if the difference is under 2K, then you don't need to do anything - just adjust it on the next return, but keep clear records so that you can show what you have done in case of an audit.
    Not quite spot on. The adjustment limit is now 10k rather than 2k.

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