VAT FRS Clarification

[Clare@InTouch]

Must be an older version, I had it confirmed by the Revenue over the phone that interest has to be included.

Agreed. The old guidance was confusing and didn't answer the question one way or the other, but HMRC must have finally become fed up of people asking and they issued new guidance which is, for once, clear.

[dynamicsaxcontractor]

Agreed. The old guidance was confusing and didn't answer the question one way or the other, but HMRC must have finally become fed up of people asking and they issued new guidance which is, for once, clear.

Guess I have to add the interest on to my next vat return then, will basically be 13% of nothing....

[rmmc]

Guess I have to add the interest on to my next vat return then, will basically be 13% of nothing....

And if you have rental income, that needs to be included too.

[rmmc]

... And no matter who the accountant was, I'd check anyway, ...

Not just the vat, I would recommend to check the accounts and tax comp too.

[kaiser78]

Also bear in mind first 12 months on FRS you are entitled to 1% discount on whichever cateogory you fall under.

[Clare@InTouch]

Also bear in mind first 12 months on FRS you are entitled to 1% discount on whichever cateogory you fall under.

Go careful though as it's first 12 months of VAT registration not FRS registration. If you're already VAT registered for 6 months and then apply for the scheme then the 1% will only be for the following 6 months.



"Discount in your first year of VAT registration
There's a one per cent reduction in the flat rate percentages for your first year of VAT registration. So if you are in your first year of VAT registration, you can reduce the flat rate percentage for your sector by one, until the day before the first anniversary of your VAT registration."

HM Revenue & Customs: Flat Rate Scheme for VAT

[Fred Bloggs]

Not just the vat, I would recommend to check the accounts and tax comp too.

Agreed.

[rsingh]

Hi all
Thanks for all the info. In a nutshell, the accountant has messed up (again). They have acknowledged their mistake and said that an adjustment will be put through in the next vat period. I will also not be receiving any financial penalty.

Once they have completed my annual accounts, I will switch to an accountant that is a bit more competent.

Motto: double check everything.

[downsouth]

You must include in your flat rate turnover:


•the value of supplies to other EU countries

how topical this one is, today find myself degregistering from FRS as accountant didn't know about this a few months ago.

Question though is, why should the FRS be an different from the normal VAT method, if you dont need to charge it then the past quarter is NIL VAT

[TheCyclingProgrammer]

how topical this one is, today find myself degregistering from FRS as accountant didn't know about this a few months ago.

Question though is, why should the FRS be an different from the normal VAT method, if you dont need to charge it then the past quarter is NIL VAT

I guess it's worth pointing out that you don't have to include EU or international supplies in your FRS turnover if they fall outside the scope of UK VAT which I would have thought would be the case for a lot of the contractors on here (and certainly, it is now the general rule that services supplied to the EU or outside the UK are outside the scope of UK VAT).