VAT Flat Rate Scheme Update

[Alan @ BroomeAffinity]

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.

On the new flat rate, you'll gain £200 for every £100k of revenue. Therefore if your "VATable" costs exceed £1200 per year it's financially beneficial. My view is its marginal at best in terms of effort v reward unless you're up around £2500. But that would be your call. Why isn't the accountant that you're paying not telling you this?

[eek]

On the new flat rate, you'll gain £200 for every £100k of revenue. Therefore if your "VATable" costs exceed £1200 per year it's financially beneficial. My view is its marginal at best in terms of effort v reward unless you're up around £2500. But that would be your call. Why isn't the accountant that you're paying not telling you this?

I would argue over the effort v reward figure as I don't think processing vat invoices is that difficult with freeagent and an expenses app....

[Alan @ BroomeAffinity]

I would argue over the effort v reward figure as I don't think processing vat invoices is that difficult with freeagent and an expenses app....

That's true, and a fair point. But we've contacted all our clients setting out the scenarios in a very neutral way and around half of the marginal cases have decided either to stick with FRS or deregister.

[Guest]

On the new flat rate, you'll gain £200 for every £100k of revenue. Therefore if your "VATable" costs exceed £1200 per year it's financially beneficial. My view is its marginal at best in terms of effort v reward unless you're up around £2500. But that would be your call.

My accountancy fees are £90 incl + insurance £33.xx + Approx £500 max on a new handset (if I feel like paying the full price).

Why isn't the accountant that you're paying not telling you this?

I have emailed him but since it's the year end I am guessing there will be a delay in the response.

Also my accountant is trying to upsell the accountancy package will costs me £50 extra pm.

[Alan @ BroomeAffinity]

VAT Flat Rate Scheme Update

My accountancy fees are £90 incl + insurance £33.xx + Approx £500 max on a new handset (if I feel like paying the full price).



I have emailed him but since it's the year end I am guessing there will be a delay in the response.

Also my accountant is trying to upsell the accountancy package will costs me £50 extra pm.

Ok. So you've got ~£300 in reclaimable VAT. IDK your rate so I can't calculate how much you'd be gaining on FRS but if we assume £100k revenue the gain is £200 so you'd be worse off by £100 on the FRS. Less if your revenue is less. More if it's more.

[Maslins]

That's true, and a fair point. But we've contacted all our clients setting out the scenarios in a very neutral way and around half of the marginal cases have decided either to stick with FRS or deregister.

Yeah out of our clients who are responding not far off half want to stick with it anyway despite the financial perspective pointing towards leaving. When you're regularly buying little things like subsistence/parking, and SaaS that's sometimes from non UK suppliers, it can be a bit of a faff figuring out which should be VATable and which shouldn't (FreeAgent's "auto VAT" is better than nothing, but it makes assumptions that won't always be correct).

[DallasDad]

With the extra effort involved in coming off the FRS can those that do foresee their accountancy fees rising as a result of any additional VAT admin overhead?

Eek thanks for the 'Xpenditure' tip I will have a look at that.

What I do find a bit odd about Freeagent is that it is dead easy to link a receipt to a bank transaction explanation but not so easy to get at it again afterwards.

[Alan @ BroomeAffinity]

With the extra effort involved in coming off the FRS can those that do foresee their accountancy fees rising as a result of any additional VAT admin overhead?.

I can only speak for us, but we've no plans to increase fees.

[PurpleGorilla]

Ok - stupid question but what about direct debits for things like mobile business phones, accountant fees - how do you get a vat invoice for those?

[RonBW]

Ok - stupid question but what about direct debits for things like mobile business phones, accountant fees - how do you get a vat invoice for those?

Payment method doesn't correlate with getting a receipt - my accountant emails me an invoice every month, and Vodafone lets me know when my monthly bill is ready each month.

Ask your supplier for a VAT receipt and they should provide you with one.