Limited Company Flat rate Vat

[Ruprect]

Yes

No

Maybe

[Scrag Meister]

Yes, you do pay CT on the difference between the gross 20% VAT charged to the client and the, for example, 14.5% of gross charged for the FRS.

[EternalOptimist]

Yes, you do pay CT on the difference between the gross 20% VAT charged to the client and the, for example, 14.5% of gross charged for the FRS.

and dont forget, gross charged means you pay 14.5% on the invoice amount + vat


which catches a lot of noobs out

so if your invoice is for £1000, you charge £200 vat = 1200

you pay the vat man 14.5% of 1200 = £174

then you pay ct on the £26 profit

which is why the frs only makes a you few hundred a year

[macgabhr]

and dont forget, gross charged means you pay 14.5% on the invoice amount + vat


which catches a lot of noobs out

so if your invoice is for £1000, you charge £200 vat = 1200

you pay the vat man 14.5% of 1200 = £174

then you pay ct on the £26 profit

which is why the frs only makes a you few hundred a year

Thanks EternalOptimist that's exactly the answer I was looking for!

[Waldorf]

and dont forget, gross charged means you pay 14.5% on the invoice amount + vat


which catches a lot of noobs out

so if your invoice is for £1000, you charge £200 vat = 1200

you pay the vat man 14.5% of 1200 = £174

then you pay ct on the £26 profit

which is why the frs only makes a you few hundred a year

But this is 2.6% - so whilst that sounds small change, if you are charging out at £80K, then this is £2080 a year - quite a tidy sum for doing nothing.

[TheFaQQer]

and dont forget, gross charged means you pay 14.5% on the invoice amount + vat

If you are in your first year of VAT registration, you also get a 1% discount on that rate as well.