VAT Flat Rate Scheme Update

[The Spartan]

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.

One thing I'm unsure of is fuel receipts, I claim mileage at the specified rate but am I able to claim the VAT back?

[Maslins]

The only change is when you're explaining your £12 payment to [whoever] on FreeAgent/similar, you need to know whether it was actually £10 net + £2 VAT, or £12 (no VAT). When you're on the FRS it makes no difference, as you wouldn't reclaim the £2 regardless.

[Maslins]

One thing I'm unsure of is fuel receipts, I claim mileage at the specified rate but am I able to claim the VAT back?

If you use FreeAgent it does the calculations, but basically you can claim a trivial % of the 45p/mile back as VAT. Theory is the 45p is partially for fuel (VATable), but also compensating for things like insurance (exempt from VAT), depreciation (outside scope of VAT). Therefore not all of the 45p is compensating for VATable costs.

How much of the 45p HMRC accepts is, depends on your fuel type and engine size. Basically from that they guestimate how much you actually spend on fuel per mile (and ignore the other costs). So if you drive a 3l petrol you'll reclaim more VAT per mile than someone driving a 1l diesel.

[TheCyclingProgrammer]

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.

BIB - true, but if you're on the FRS there was never any need for these to be VAT receipts/invoices. To reclaim the VAT on the standard scheme, they will need to be.

Unlikely to be a problem for most things but it means if you want to claim VAT on every last little thing you'll need to make the extra effort to obtain a proper VAT receipt.

[DallasDad]

Maslins, Sue Ellen
Thank you very much.
I had missunderstood the context of where relevant goods applied.

[Ebenezer]

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.

Not sure that this is a difference; I think my receipts are shared with the accountant now, assuming he can be arsed to look at them in FreeAgent. Isn't the difference that you have to accurately record whether an expense is VAT-able or not, whereas on the FRS this didn't really matter?

Or is there some additional fiduciary duty on the part of the accountant for non-FRS clients that involves wading through piles of receipts from Gregg's?

[wantacontract]

I am going to de-register....I haven't been turning over that much in the last 4-5 years anyway....maybe only going over the threshold 2 of those years.

and going forward I have decided I am taking more holidays.

[kaiser78]

My accountant keeps delaying on advising me whether to say on the FRS or move away from it, on the basis that it is not totally clear cut yet around the new 16.5% category, and they are still waiting to see how this will play out.

However many of my colleagues and posters on here appear to have had some direction, so I am unsure as to why my accountant is dragging his heels so much.

[SueEllen]

My accountant keeps delaying on advising me whether to say on the FRS or move away from it, on the basis that it is not totally clear cut yet around the new 16.5% category, and they are still waiting to see how this will play out.

However many of my colleagues and posters on here appear to have had some direction, so I am unsure as to why my accountant is dragging his heels so much.

More work for the accountant if they do your VAT. You have to send them all VAT receipts and invoices every quarter on time.

[Guest]

I am not sure whether I should continue with FRS or not as my expenses are very limited.

I only claim for monthly accountancy changes, business insurance and some computer hardware / mobile phone (less than £500 each year).

I don't claim anything else.