VAT FRS Clarification

[Vallah]

That's up to £10,000 now.

HM Revenue & Customs

Thanks Clare, shows how long it's been since I did a UK VAT return! That's half a million's worth of wrong invoices then before he'd get into trouble with the VAT man if the percentage fee was wrong.

[Stag Cozier]

Don't forget to add bank interest received as part of your VAT calculation under Flat Rate (even though it's probably peanuts like the rest of us receive in a company account!)

[dynamicsaxcontractor]

Don't forget to add bank interest received as part of your VAT calculation under Flat Rate (even though it's probably peanuts like the rest of us receive in a company account!)

I think you are wrong, see below from the flat rate turnover calculation section on the revenues website:

You must include in your flat rate turnover:

•VAT-inclusive sales and takings for standard-rate, zero-rate and reduced-rate supplies
•the value of exempt supplies like rent or lottery commission
•sales of capital expenditure goods, unless they're goods where you reclaimed the VAT on the purchase
•the value of supplies to other EU countries

[Lumiere]

I think you are wrong, see below from the flat rate turnover calculation section on the revenues website:

Nope, you are wrong:

Working out how much VAT you need to pay using your flat rate percentage

You calculate your VAT payable to HMRC by applying your flat rate VAT percentage to your 'flat rate turnover'. If you are still in your first year of VAT registration, remember to reduce your flat rate percentage by one.

Your flat rate turnover is all the supplies your business makes including all:

* VAT inclusive sales for standard rate, zero rate and reduced rate supplies
* sales of exempt supplies, such as rent or lottery commission - you don't have to make any partial exemption calculations
* sales of capital expenditure goods - unless you have previously reclaimed the VAT, in which case they must be accounted for at the standard rate and not the flat rate.
* sales to other EU countries
* bank interest received on a business account
* sales of second-hand goods - but if you sell a lot of these, you may be better off leaving the Flat Rate Scheme and using a margin scheme

HM Revenue & Customs: Flat Rate Scheme for VAT

Next.

[TheCyclingProgrammer]

Sort of interestingly, that is exactly the mistake my accountants made earlier this year. Luckily, I work out my own VAT and I use this to check the accountants figures. They were wrong for my first VAT payment in 2010.

If my accountants were making such basic errors, I'd be finding a new accountant.

[dynamicsaxcontractor]

Nope, you are wrong:



HM Revenue & Customs: Flat Rate Scheme for VAT

Next.

We are both right.

HM Revenue & Customs: Flat Rate Scheme: how to complete your VAT Return box-by-box

[Old Greg]

Slightly off-topic, but I recently moved from the IT band to the Management Consultancy saving myself 0.5%, which is 1 day's work per year.

[Lumiere]

I am about to get a new accountant and want to know my exact position and therefore will get them to recheck my books for my whole trading history.

When you say books, do you mean your own records ? I am asking because the only documentation I get from my accountant are personal tax returns and company annual returns.

I wonder what happens if I need to change them, is it a common practice for accountants to pass the records to the whoever I am moving to, what's the transfer process normally like?

For example I have no idea what my chart of accounts is in between year ends

[Lumiere]

We are both right.

HM Revenue & Customs: Flat Rate Scheme: how to complete your VAT Return box-by-box

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

[Fred Bloggs]

If my accountants were making such basic errors, I'd be finding a new accountant.

You have a valid point, however, on asking around, it seems that the mainstream contractor focussed accountants are pretty much all the same. And no matter who the accountant was, I'd check anyway, so I have decided to stay where I am.