Quick Q for the VAT experts

[tino]

Guys,

I'm on the normal scheme and it's not proving beneficial whatsoever for me - I have huge expenses (flights, cheap digs which are non VAT registered and taxi's) none of which I can claim VAT on.

I've asked my accountant to put the wheels in motion to move to the FRS and also asked if it's possible for this to be backdated - I'm just waiting on a response.

So friends, my question is - Will HMRC allow me to backdate entry to the FRS?

[Moscow Mule]

Only as far back as your last VAT return IIRC.

[Maslins]

Very unlikely you'll be able to backdate it.

Don't see why you've been worse off (at least relative to not being VAT registered). Ok so maybe that VAT you've reclaimed is minimal, but if nothing else you got the cashflow advantage of being able to hold onto the VAT on your sales for a while before paying over to HMRC.

But yes, the flat rate scheme is typically the best way to go for contractors, as VATable purchases are normally low.

[tino]

The last return would do me to be fair, I'd be happy with that

Maslins - this quarter, the difference is close to £1000

[Maslins]

Maslins - this quarter, the difference is close to £1000

Difference between what? Being "normal" VAT registered and on the FRS?

I believe you...FRS is profitable for virtually all contractors. I was just saying that I don't see how you're worse off being "normal" VAT registered than when you were not VAT registered at all.

[tino]

Difference between what? Being "normal" VAT registered and on the FRS?

I believe you...FRS is profitable for virtually all contractors. I was just saying that I don't see how you're worse off being "normal" VAT registered than when you were not VAT registered at all.

Yes indeed, hence me trying to change and backdate

[ASB]

Yes indeed, hence me trying to change and backdate

Tino,

You mention flights. This suggest that some of your work might be abroad. Tread carefully if so, you need to be absolutely sure that this work is outside the scope of UK vat otherwise it's part of your FRS turnover and you could be potentially paying FRS vat on turnover you haven't charged VAT on.

[tino]

Tino,

You mention flights. This suggest that some of your work might be abroad. Tread carefully if so, you need to be absolutely sure that this work is outside the scope of UK vat otherwise it's part of your FRS turnover and you could be potentially paying FRS vat on turnover you haven't charged VAT on.

Thanks ASB,

I'm based in Belfast and working in England so it's all above board

[BolshieBastard]

Guys,

I'm on the normal scheme and it's not proving beneficial whatsoever for me - I have huge expenses (flights, cheap digs which are non VAT registered and taxi's) none of which I can claim VAT on.

I've asked my accountant to put the wheels in motion to move to the FRS and also asked if it's possible for this to be backdated - I'm just waiting on a response.

So friends, my question is - Will HMRC allow me to backdate entry to the FRS?

Nope.

But if you cant reclaim any VAT, why bother with even the FRS? Its just another route to an investigation.

[ASB]

Thanks ASB,

I'm based in Belfast and working in England so it's all above board

Wasn't saying it wasn't above board. Only that if you are UK registered and work outside the UK there is the possibility of some difficulties. In any event given you are spending on non vatable items like flights are you sure the FRS is right for you? Sure you pay less vat but can't reclaim anything (except capital spend over 2k). It may be that with the FRS though simpler to operate it means you actually end up handing more over, was certainly the case for me.