Calculating FR VAT

[Maxamus]

I cant get my head around this.

- I'm recieving circa £300 a week VAT on services rendered, then over 3 months this would equal £3,600.
- My industry is 12.5% (minus 1% for 1st year making it 11.5%)

Then what do i keep out of that VAT recieved and what do i give to the tax man every quarter?


I know Einstien produced a 24 page mathematical formula but i cant find it anywhere...

[Swamp Thing]

Maxamus,
Do it this way (using your figures). From your standard rate VAT I am assuming you invoice approx £1,700 per week. So:

£1,700 x 12 weeks = £20,400
Standard rate VAT @ 17.5% = £3,570
TOTAL = £23,970

FR VAT (1st yr) 11.5% on £23,970 = £2,757

So £2,757 is what you pay HMRC, but in that quarter you made a little profit of £3,570 - £2,757 = £813. This is the reward you get for making Hector’s admin so much easier by registering on the FRS.

Oh, and if you have any significant capital purchases made in the period (above £2,000 I believe), these can be offset against your FR payment. But nothing else.

HTH

[Bluebird]

It's also good to check out the FRS %s for types of business.

IT Consultancy is 13%, whereas Business Services is 12.5%.

Try and pick a service which has the lowest %, but you can still claim to be in if IR check you out.

[Maxamus]

now it all makes sense
thanks