VAT Flat Rate Scheme Update

[TheCyclingProgrammer]

I take it then all VAT expenses could then be deducted?

So long as the things you buy are used for business purposes. If there's any private use you may have to restrict your claim.

https://www.gov.uk/guidance/vat-priv...s-and-services

[DallasDad]

Examples of supplies that aren’t relevant goods
This isn’t an exhaustive list:

accountancy fees, these are services
advertising costs, these are services
an item leased/hired to your business, this counts as services, as ownership will never transfer to your business
food and drink for you or your staff, these are excluded goods
fuel for a car this is excluded unless operating in the transport sector using your own, or a leased vehicle
laptop or mobile phone for use by the business, this is excluded as it is capital expenditure see paragraph 15.1
anything provided electronically, for example a downloaded magazine, these are services
rent, this is a service
software you download, this is a service
software designed specifically for you (bespoke software), this is a service even if it is not supplied electronically

Me confused!
Alan do you still think accoutancy fees are not considered relevant goods, or am I missunderstanding what that term means!

Gorilla are suggesting coming off FRS on the basis of the comparative savings on VAT for accountancy fees alone, on my current turn over it is not a massive amount but they indicate VAT is reclaimable for their fees.

[The Spartan]

Me confused!
Alan do you still think accoutancy fees are not considered relevant goods, or am I missunderstanding what that term means!

Gorilla are suggesting coming off FRS on the basis of the comparative savings on VAT for accountancy fees alone, on my current turn over it is not a massive amount but they indicate VAT is reclaimable for their fees.

Accountancy is classed as a service not goods therefore it would not count in the calculations for the when the updated version of theFRS comes into play.

[SueEllen]

Me confused!
Alan do you still think accoutancy fees are not considered relevant goods, or am I missunderstanding what that term means!

You are misunderstanding the term.

Goods are tangible objects.

Can you physically hold accountancy?

[youngguy]

I got the same advice as PC (from one of the big contractor accountants) -
[INDENT][/ This of course will require your additional time for potentially minimal benefit, '

What extra work and time is required from the contractor ?

[Maslins]

Me confused!
Alan do you still think accoutancy fees are not considered relevant goods, or am I missunderstanding what that term means!

Gorilla are suggesting coming off FRS on the basis of the comparative savings on VAT for accountancy fees alone, on my current turn over it is not a massive amount but they indicate VAT is reclaimable for their fees.

Accountancy fees are not goods. This means they won't help to stop you being a "low cost trader" if you stay on the FRS.

What Gorilla are talking about is you leaving the FRS, and then you'll be able to reclaim VAT on the majority of your business costs, regardless of whether goods or services. If you leave the FRS, whether or not you're a low cost trader is irrelevant.

[SueEllen]

What extra work and time is required from the contractor ?

I do my own VAT so for my first return I have to hunt out the invoices for my accountant, mobile phone, business broadband, business web accounts/software and what I invoice my clients.

I suspect that's what they alluding to - that every quarter you have to find these plus hotel bills, training bills and low cost business equipment you buy.

As the vast majority of these are held electronically it won't take long.

[youngguy]

I do my own VAT so for my first return I have to hunt out the invoices for my accountant, mobile phone, business broadband, business web accounts/software and what I invoice my clients.

I suspect that's what they alluding to - that every quarter you have to find these plus hotel bills, training bills and low cost business equipment you buy.

As the vast majority of these are held electronically it won't take long.

So is the only real change you have to keep receipts / invoices and be willing to share them with your accountant?

Forgive the basic Q but I have always been on FRS

[SueEllen]

So is the only real change you have to keep receipts / invoices and be willing to share them with your accountant?

Forgive the basic Q but I have always been on FRS

You should have always kept your receipts and invoices.

The VAT man does random inspections regardless of what scheme you are on.

The only difference is now you have to share them with your accountant.

[youngguy]

You should have always kept your receipts and invoices.

The VAT man does random inspections regardless of what scheme you are on.

The only difference is now you have to share them with your accountant.

Excellent thanks 😀

Don't worry, mine all get put in a Polly pocket, labelled by month and year, so I am all good! It just means a bit of scanning and emailing to my accountant