Incorrectly assumed VAT charged on monthly season ticket

[tbrain]

For years I've been submitting monthly season train ticket expenses, and when doing so have made the assumption that VAT is charged on these tickets at 20% So, when submitting my monthly expenses to the accountant for a train ticket of e.g. £960, have submitted expenses of £800 net, £160 VAT, £960 gross. I am on FRS, and the tickets were for about 6 months paid for using my personal credit card before subsequently being paid for on company debit & credit cards.

So by incorrectly assuming VAT was applied, have I lost out in any way e.g. increased corporation tax bill?

[eek]

For years I've been submitting monthly season train ticket expenses, and when doing so have made the assumption that VAT is charged on these tickets at 20% So, when submitting my monthly expenses to the accountant for a train ticket of e.g. £960, have submitted expenses of £800 net, £160 VAT, £960 gross. I am on FRS, and the tickets were for about 6 months paid for using my personal credit card before subsequently being paid for on company debit & credit cards.

So by incorrectly assuming VAT was applied, have I lost out in any way e.g. increased corporation tax bill?

[NLUK mode]
Have you thought about asking your accountant

[/NLUK mode]

But seriously as you can't reclaim VAT if you are on the flat rate scheme the £800+£160 vat would have been treated as an expense of £960 so it shouldn't have made any difference regarding profits...

[Clare@InTouch]

[NLUK mode]
Have you thought about asking your accountant

[/NLUK mode]

But seriously as you can't reclaim VAT if you are on the flat rate scheme the £800+£160 vat would have been treated as an expense of £960 so it shouldn't have made any difference regarding profits...

WES

[tbrain]

[NLUK mode]
Have you thought about asking your accountant

[/NLUK mode]

But seriously as you can't reclaim VAT if you are on the flat rate scheme the £800+£160 vat would have been treated as an expense of £960 so it shouldn't have made any difference regarding profits...

Had done, but didn't want to go making work for myself & wanted to guage everyones opinions before doing so...

[Wanderer]

for a train ticket of e.g. £960, have submitted expenses of £800 net, £160 VAT, £960 gross. I am on FRS

Hmm, did your company reimburse you £960 for the ticket? If so then no problem. Also, since you are on the FRS you wouldn't have tried to (incorrectly) reclaim VAT either so once again, no problem. Your accountant probably shrugged and just logged it as £960 but it's worth checking.

In future, you should always get a VAT receipt which will show you the actual VAT paid because some things don't have VAT or it's at a different rate to what you expected....

[Contreras]

In future, you should always get a VAT receipt which will show you the actual VAT paid because some things don't have VAT or it's at a different rate to what you expected....

Why? Yes you must keep receipts (or, exceptionally, other proof) but one of the benefits of the FRS is that you don't need to fuss about getting VAT receipts.

I do keep a record of VAT in the purchase ledger but only so that at year end I can make a rough assessment of how much being on the FRS has saved/cost the company. If VAT content is not specified on a receipt then I make an educated assumption, it doesn't affect the company accounts or CT calculation in any way.

[tbrain]

Thanks all.

I've queried this with the accountants, so I'll let you know what they have to say...

[tbrain]

Response from accountant. Apparently it is always the gross amount that is processed, so no problems...

[TheCyclingProgrammer]

Good news, but do try and be a bit more careful in future. You were lucky this time as being on the FRS means there was no significant affect on your books or returns, but if you'd been on the normal VAT scheme you'd have some corrections to file.

If in doubt, always check. UK tax rules are far too stupidly complicated and inconsistent to assume anything.

[psychocandy]

Weird question. As others said, if you're on Flat then it makes no odds anyway.

Saying that, had an accountant a few years back (I binned him after few months) that used to tell me I had to keep receipts from petrol stations in case I got investigated for VAT. No idea where this came from because I was just claiming 45p mile like usual. IMHO **** all to do with how and where I got my fuel from but there we go. If HMRC think I'm not doing the journey at all then thats a different matter (and obviously fraudlent) but I would have thought invoice/timesheet highlighting days billing at site X would clear that one up.

He reckoned that it was to prove you were doing the miles for VAT purposes. Weird.