Simple VAT Question

[Moscow Mule]

I once had a freaky kitkat that had no wafer! It was actually quite tasty.

I've had one of those. I hope that didn't use up all my luck, rendering my efforts to win the lottery even more useless!

[Archangel]

From the VAT FRS guide on the webby at:-
http://customs.hmrc.gov.uk/channelsP...00345#P88_6880

This is the test to join the scheme - if you exclude Bank interest from this, then IMHO you also exclude from the FRS calculations?


3.3 How do I work out my total income for Test 2?
Leave out any anticipated sales of capital assets but include all of the following:

the total value of the supplies you worked out in Test 1
the value of any exempt supplies, such as rent, lottery commission or bank interest on a business account and
any other income received or receivable by your business. This includes any non-business income such as that from charitable or educational activities.

does include mean something else then?

[ctdctd]

does include mean something else then?

Oops - I bad

[Lewis]

does include mean something else then?

Grrrr. The document you are quoting from is the criteria for JOINING the flat rate scheme it is NOT about how to fill in your VAT return. This link describes how to fill in you VAT return http://www.businesslink.gov.uk/bdotg...mId=1073790790 I assume you are saying you should add bank interest to invoives (sales) in box 6. The guidance says total sales and also "zero rated and exempt supplies". The following link says what these are http://www.avnmembers.co.uk/knowledg...oandexempt.htm. Bank interest is NOT one of them.

I conclude therefore you ignore bank interest when calculating your VAT each quarter.

But I agree you consider it in your income when deciding if you can join the scheme or not!

[Lewis]

Also, see here http://forums.contractoruk.com/accou...-interest.html

[SueEllen]

A strange but true fact is that the VAT office if you ring them up are happy to tell you what you pay VAT on, and if you don't know how to complete a particular form how to complete it. Just don't waste their time asking questions that are not relevant to you.

BTW Lewis et al are correct - bank interest is included in your overall income but you don't pay VAT on it.

[d000hg]

Can someone clarify if income I get from the US is something I'd have to pay VAT from, if I register from VAT? I've heard contradictory statements...

1)It's not eligible so if I register for VAT it makes no difference to my US clients.
2)I have to pay VAT on my US income, but since they don't have VAT in the US it would effectively mean a 17.5% increase in my charge as far as they're concerned.

Anyone able to clear this up, preferably backed up with some evidence?

[ASB]

Can someone clarify if income I get from the US is something I'd have to pay VAT from, if I register from VAT? I've heard contradictory statements...

1)It's not eligible so if I register for VAT it makes no difference to my US clients.
2)I have to pay VAT on my US income, but since they don't have VAT in the US it would effectively mean a 17.5% increase in my charge as far as they're concerned.

Anyone able to clear this up, preferably backed up with some evidence?

a) Read my earlier reply.
b) Read this http://forums.contractoruk.com/accou...h-own-ltd.html
c) Read this
http://forums.contractoruk.com/accou...t-germany.html

The answer is almost certainly "you don't charge vat" but it depends on a number of factors that are specific to how you do business where you do it and where your company may or may not have branches.

You should find all the information you need for how to apply the rules to your situation in here. Also it's a good idea to check with HMRC that how you believe it applies to you is correct. You may also need to refer to the numerous HMRC documents.

[Ardesco]

Can someone clarify if income I get from the US is something I'd have to pay VAT from, if I register from VAT? I've heard contradictory statements...

1)It's not eligible so if I register for VAT it makes no difference to my US clients.
2)I have to pay VAT on my US income, but since they don't have VAT in the US it would effectively mean a 17.5% increase in my charge as far as they're concerned.

Anyone able to clear this up, preferably backed up with some evidence?

You don't pay VAT on services that you supply to the US. It is hidden away somewhere in the HMRC website.

Are you supplying services?

[Ardesco]

http://customs.hmrc.gov.uk/channelsP...ument#P32_3456

May help clear it up a bit.

As an example I sell some web hosting as part of Plan B. One of my customers is in Canada so I do not charge her VAT because I am supplying a service to somebody who is outside the EU and she is not liable for VAT.

Hope this helps.