Filing in a VAT Return when on flat rate.

[Snarf]

Afternoon all,
Before I start Im going to give you a bit of background, Ive been VAT registered for 6 months and have done two returns now, in both instances I've had my accountant verify what I have been entering and he has confirmed that its correct.
I have a friend who has been VAT registered for the last month and has just sent his return to his accountant to get checked and he has flagged that it is wrong.

Example (simplified)
Period : September - November
Invoices Paid Net : £1000
Invoices Paid Gross : £1200

Now the way that I read it and the way my accountant says it should be:

VAT due in this period on sales and other outputs (Box 1): £162 (13.5% of Gross)

AT due in this period on acquisitions from other EC Member States (Box 2): 0

Total VAT due (the sum of boxes 1 and 2) (Box 3): £162

VAT reclaimed in this period on purchases and other inputs, (including acquisitions from the EC) (Box 4): £0

Net VAT to be paid to HM Revenue & Customs or reclaimed by you (Difference between boxes 3 and 4) (Box 5): £162

Total value of sales and all other outputs excluding any VAT. Include your box 8 figure (Box 6): £???

My question to you all what should the value of box 6 be? Lets see whos accountant is right!

[Louisa@InTouch]

If you are on the flat rate scheme: Box 6 should be the VAT inclusive (gross) figure of all invoices.

It is the total turnover that you are applying the flat rate percentage.

However if you are on the standard rate scheme: Box 6 should be the VAT exclusive (net) figure of all invoices.

[northernladuk]

Freeagent does it all and you just have link it to your gateway account. Happy days

[Snarf]

Balls

Found guidance online which confirms what you've said.

https://www.gov.uk/government/public...our-vat-return

Section 7.5

Though its not clear from the HMRC form that this is the case! So now I have to go back over my previous returns and check them - My accounts advice was wrong (I assume he doesn't realise that I went onto the FRS... either that or I need to change accountants)

[Dactylion]

Freeagent does it all and you just have link it to your gateway account. Happy days

Possibly if you are running your own business you ought to understand these things rather than just trusting a 3rd Party - It is you who are responsible you know?

I can just see the VAT Inspectors face when your "Defence" is:
"I filled in the Freeagent form.........."

AYSYACOTBAC?

[northernladuk]

Possibly if you are running your own business you ought to understand these things rather than just trusting a 3rd Party - It is you who are responsible you know?

I can just see the VAT Inspectors face when your "Defence" is:
"I filled in the Freeagent form.........."

AYSYACOTBAC?

Indeed but having a tool that compiles it for checking and then hitting a button submits it is a welcome bonus in my book.

[TheCyclingProgrammer]

Possibly if you are running your own business you ought to understand these things rather than just trusting a 3rd Party - It is you who are responsible you know?

I can just see the VAT Inspectors face when your "Defence" is:
"I filled in the Freeagent form.........."

AYSYACOTBAC?

True. There was a time when FreeAgent got this wrong, many years ago. They used to include supplies that were outside the scope of UK VAT in Box 6 which was wrong (they shouldn't appear on your return at all) and I ended up with an enquiry because the total didn't match up with my VAT amount.

The form on the HMRC website says VAT exclusive amount for box 6 - which is the case on the normal scheme - and this has been this way for as long as I can remember. They've never bothered updating it to reflect the FRS but the VAT guide to the FRS makes it clear.

[LondonManc]

Send your spreadsheet to your agent, get them to give you the numbers that you should be entering into your VAT return, enter it yourself, then pay your VAT return. Works for me.

Otherwise, what are you paying your accountant for? Would you buy a dog and bark yourself?

[Snarf]

Send your spreadsheet to your agent, get them to give you the numbers that you should be entering into your VAT return, enter it yourself, then pay your VAT return. Works for me.

Otherwise, what are you paying your accountant for? Would you buy a dog and bark yourself?

my spread sheet has the values that are needed already totalled up... I'd basically be emailing him saying what does it say in cell c3 on the dashboard..

The issue here wasn't that I didn't know what values to put in, it was that the hmrc form explicitly says to enter the wrong one!

Anyway HMRC have said just to rectify on the next return, all payments are correct so no harm done.

Thanks for the comments everyone.


Ps NLUK, I don't use free agent because as far as I could see it does the same job as my accountant.. The few bits that it does that would be a help I can do myself quickly enough that it's not worth it.
I'd be interested to know if there something I maybe missed when I looked at it though?

[northernladuk]

Ps NLUK, I don't use free agent because as far as I could see it does the same job as my accountant.. The few bits that it does that would be a help I can do myself quickly enough that it's not worth it.
I'd be interested to know if there something I maybe missed when I looked at it though?

Yep I was exactly the same when I was with SJD using their spreadsheet and people were saying Freeagent and other portals are better and no I don't think there is anything you are missing. The spreadsheet worked really well and the accountant was always on hand etc. so I had no reason to change. Am sure I commented in a few threads that I'd get round to trying freeagent should anything go south with my current situation. Sadly it did with an unreliable accountant I couldn't trust so went to another I did trust. They had Freeagent and after a bit of a slow start I'm quite happy with it. Has some clever features like the bank imports, quick submission of VAT and RTI etc... but yes, the old system worked fine. I certainly wouldn't advocate you leaving if you are happy with the situation which it looks like you are.