VAT FlatRate payment calculation

[MikeC1408]

Pay at the Flat Rate, you'll get a letter confirming your acceptance to FRS and the date your elligable

If they screw it up you can always pay more next quarter with out having to inform them if the amount is under 2K.

[sathyaram_s]

If my understanding is right, the proper way is to pay the full VAT until the confirmation is received. If you have overpaid, it can be adjusted in the following quarter.

Pay at the Flat Rate, you'll get a letter confirming your acceptance to FRS and the date your elligable

If they screw it up you can always pay more next quarter with out having to inform them if the amount is under 2K.

[MikeC1408]

If my understanding is right, the proper way is to pay the full VAT until the confirmation is received. If you have overpaid, it can be adjusted in the following quarter.

Yep suppose you could do it that way for peace of mind.

[i-am-ltd]

The flat rate of 13% or 12% in the first year for IT contractors is payble on the GROSS revenue.

VAT % charged on Gross Revenue is 14.8936% (its 17.5% of net)
VAT % payble to HMRC is 12% in the first year or 13% on Gross Revenue

Profit for using FRS is - 2.8936% in the first year or 1.8936% after first year.

On a Gross Revenue of £100,000 you get to keep £2893.60 or £1893.60, ofcourse you have to pay corporation tax on this.

[css_jay99]

The flat rate of 13% or 12% in the first year for IT contractors is payble on the GROSS revenue.

VAT % charged on Gross Revenue is 14.8936% (its 17.5% of net)
VAT % payble to HMRC is 12% in the first year or 13% on Gross Revenue

Profit for using FRS is - 2.8936% in the first year or 1.8936% after first year.

On a Gross Revenue of £100,000 you get to keep £2893.60 or £1893.60, ofcourse you have to pay corporation tax on this.

not sure i follow your calculations


oK,

i gave the HMRC guys a call today and was told that application for FRS is accepted and I can use it for my first return, but they will also send out a confirmation letter for this.

Ok so I dont get things mixed up now that FRS has been approved.

I HAD charged my clients 17.5% VAT on all services for the VAT return period.

Questions:

1) Is that (i.e 17.5%) What I am supposed to be charging ?
2) Assuming that services = £100,000 & 17.5% VAT = 17500
Beign 1st yr, does this mean i then pass £117,500 * 12% = £14100 to VAT man ?
hence i get to keep 17500-14100 = £3400 ?
3)Like the corp tax return, are all figures rounded up to the £ ?



cheers
Carlton

[r0bly0ns]

1) Is that (i.e 17.5%) What I am supposed to be charging ?
2) Assuming that services = £100,000 & 17.5% VAT = 17500
Beign 1st yr, does this mean i then pass £117,500 * 12% = £14100 to VAT man ?
hence i get to keep 17500-14100 = £3400 ?
3)Like the corp tax return, are all figures rounded up to the £ ?



cheers
Carlton

Not sure about 3 (this info will be on your VAT return form), but you are correct with 1 & 2.

[thunderlizard]

They were both right. You do need to apply separately, but you can backdate the effective date. And don't get angry because the flat rate scheme isn't a human right, it's a rather natty corporate privilege that turns you from an unpaid tax-collector that has to track zillions of receipts, to an adequately paid tax-collector that just has to fill in a form every quarter.

[css_jay99]

thank u very much guys!



css_jay99

[sathyaram_s]

You may have to confirm the start date of your FRS.

In my case, my FRS start date was middle of a VAT period (though I had requested it to be from the start of the quarter) - so had both normal and flat rate vat applied for that period.

Ok so I dont get things mixed up now that FRS has been approved.

[MikeC1408]

not sure i follow your calculations


oK,

i gave the HMRC guys a call today and was told that application for FRS is accepted and I can use it for my first return, but they will also send out a confirmation letter for this.

Ok so I dont get things mixed up now that FRS has been approved.

I HAD charged my clients 17.5% VAT on all services for the VAT return period.

Questions:

1) Is that (i.e 17.5%) What I am supposed to be charging ?
2) Assuming that services = £100,000 & 17.5% VAT = 17500
Beign 1st yr, does this mean i then pass £117,500 * 12% = £14100 to VAT man ?
hence i get to keep 17500-14100 = £3400 ?
3)Like the corp tax return, are all figures rounded up to the £ ?



cheers
Carlton

No. 2 is correct assuming that 13% is the Flat Rate for your profession.