Contracting and Flat rate VAT

[Sockpuppet]

Not on FRS - done the maths and both are about the same for me so its easier to stay off it as I CBA to change my sage setup.

[IR35 Avoider]

do you mean that by being on the flat rate scheme you kept £2500 back compared to what you would have given them if you were not on the flat rate?

Ta

Yes.

[jchiver]

Thanks for all the info and it would seem that most people are on the flat rate.

I guess that leads me on to my next questions which is how much in % do you keep from your day rate?

Regards,

[eek]

Thanks for all the info and it would seem that most people are on the flat rate.

I guess that leads me on to my next questions which is how much in % do you keep from your day rate?

Regards,

Total Billings @ £40,000
Output VAT @ 20% = £8,000 (Added to total for purposes of calculating flat rate VAT)

Total VAT payable would be 14.5% of £48,000 = £6,960

So you get to keep £1040.

[TestMangler]

Not on FRS coz I iz a propa bizniz, innit.

[d000hg]

Not on it, my VAT is negative so HMRC pay me quarterly.

[JamJarST]

Total Billings @ £40,000
Output VAT @ 20% = £8,000 (Added to total for purposes of calculating flat rate VAT)

Total VAT payable would be 14.5% of £48,000 = £6,960

So you get to keep £1040.

Just to add to this. In your first year of FRS, HMRC give you a 1% so you would pay 13.5% VAT in the example above.