Reply to: Filing in a VAT Return when on flat rate.

[mudskipper]

A question we all asked at the beginning - shows we're paying attention

[jamesbrown]

Yes that's right, I was talking about the FRS.

The reverse charge mechanism is another thing that until recently FreeAgent didn't handle at all. How many people on here remember to reverse charge any purchases they make from suppliers outside the UK and enter it on the VAT return?

Me

Bloody invoice from Google Ireland Limited every month

[TheCyclingProgrammer]

Yes that's right, I was talking about the FRS.

The reverse charge mechanism is another thing that until recently FreeAgent didn't handle at all. How many people on here remember to reverse charge any purchases they make from suppliers outside the UK and enter it on the VAT return?

[jamesbrown]

They used to include supplies that were outside the scope of UK VAT in Box 6 which was wrong (they shouldn't appear on your return at all)

I don't know where you got that from (I assume the inspector that checked?), but it's wrong. Perhaps you weren't including it(?) See here, specifically section 3.7, "Filling in box 6".

Edit: oh, my apologies, having read the thread more carefully (), I see now that you're referring to FRS accounting. Yes, supplies that are outside of the scope of UK VAT are not included in the FRS turnover and hence not included in Box 6. This is alluded to in section 4.1 of the above link:

Enter the turnover to which you applied your flat rate percentage, including VAT. You should also include the value, excluding VAT, of any supplies accounted for outside the Flat Rate Scheme, such as the sale of any capital goods on which you have reclaimed input VAT, and reverse charge transactions. Also include any amount you have entered in box 8.

[Contreras]

My question to you all what should the value of box 6 be? Lets see whos accountant is right!

Assuming VAT flat rate scheme...

It's gross turnover, £1200.

The HMRC form is wrong.

Trust no one.

HTH

[Michael at BI Accountancy]

My accounts advice was wrong (I assume he doesn't realise that I went onto the FRS... either that or I need to change accountants)

I would definitely raise the question why your accountant has given incorrect advice.

They should have picked up on the fact it's likely FRS if no purchases are being listed on the return!

[SueEllen]

Send your spreadsheet to your agent, get them to give you the numbers that you should be entering into your VAT return, enter it yourself, then pay your VAT return. Works for me.

Otherwise, what are you paying your accountant for? Would you buy a dog and bark yourself?

I went on a VAT course ages ago. The advice the inspector, who ran the course, gave was to understand your VAT yourself that way you are forced to look at your books and can see if anything is wrong.

VAT inspectors do not accept it as an defence that someone did your VAT for you. She stated when she use to go around to small businesses/individuals and was given every excuse under the book why their VAT returns were incorrect.

Myself and the entire group were then told more things we could claim VAT on showing that lots of accountants and bookkeepers give out incorrect advice which isn't surprising due to having to deal with different types of businesses who do different things. In my case I was told by my then accountant, to put down an expense as entertainment.

Oh and completing VAT returns is trivial even if you have more than one client. It's when you have loads of clients like shops where it becomes a pain.

[northernladuk]

Ps NLUK, I don't use free agent because as far as I could see it does the same job as my accountant.. The few bits that it does that would be a help I can do myself quickly enough that it's not worth it.
I'd be interested to know if there something I maybe missed when I looked at it though?

Yep I was exactly the same when I was with SJD using their spreadsheet and people were saying Freeagent and other portals are better and no I don't think there is anything you are missing. The spreadsheet worked really well and the accountant was always on hand etc. so I had no reason to change. Am sure I commented in a few threads that I'd get round to trying freeagent should anything go south with my current situation. Sadly it did with an unreliable accountant I couldn't trust so went to another I did trust. They had Freeagent and after a bit of a slow start I'm quite happy with it. Has some clever features like the bank imports, quick submission of VAT and RTI etc... but yes, the old system worked fine. I certainly wouldn't advocate you leaving if you are happy with the situation which it looks like you are.

[Snarf]

Send your spreadsheet to your agent, get them to give you the numbers that you should be entering into your VAT return, enter it yourself, then pay your VAT return. Works for me.

Otherwise, what are you paying your accountant for? Would you buy a dog and bark yourself?

my spread sheet has the values that are needed already totalled up... I'd basically be emailing him saying what does it say in cell c3 on the dashboard..

The issue here wasn't that I didn't know what values to put in, it was that the hmrc form explicitly says to enter the wrong one!

Anyway HMRC have said just to rectify on the next return, all payments are correct so no harm done.

Thanks for the comments everyone.


Ps NLUK, I don't use free agent because as far as I could see it does the same job as my accountant.. The few bits that it does that would be a help I can do myself quickly enough that it's not worth it.
I'd be interested to know if there something I maybe missed when I looked at it though?

[LondonManc]

Send your spreadsheet to your agent, get them to give you the numbers that you should be entering into your VAT return, enter it yourself, then pay your VAT return. Works for me.

Otherwise, what are you paying your accountant for? Would you buy a dog and bark yourself?

[TheCyclingProgrammer]

Possibly if you are running your own business you ought to understand these things rather than just trusting a 3rd Party - It is you who are responsible you know?

I can just see the VAT Inspectors face when your "Defence" is:
"I filled in the Freeagent form.........."

AYSYACOTBAC?

True. There was a time when FreeAgent got this wrong, many years ago. They used to include supplies that were outside the scope of UK VAT in Box 6 which was wrong (they shouldn't appear on your return at all) and I ended up with an enquiry because the total didn't match up with my VAT amount.

The form on the HMRC website says VAT exclusive amount for box 6 - which is the case on the normal scheme - and this has been this way for as long as I can remember. They've never bothered updating it to reflect the FRS but the VAT guide to the FRS makes it clear.

[northernladuk]

Possibly if you are running your own business you ought to understand these things rather than just trusting a 3rd Party - It is you who are responsible you know?

I can just see the VAT Inspectors face when your "Defence" is:
"I filled in the Freeagent form.........."

AYSYACOTBAC?

Indeed but having a tool that compiles it for checking and then hitting a button submits it is a welcome bonus in my book.

[Dactylion]

Freeagent does it all and you just have link it to your gateway account. Happy days

Possibly if you are running your own business you ought to understand these things rather than just trusting a 3rd Party - It is you who are responsible you know?

I can just see the VAT Inspectors face when your "Defence" is:
"I filled in the Freeagent form.........."

AYSYACOTBAC?

[Snarf]

Balls

Found guidance online which confirms what you've said.

https://www.gov.uk/government/public...our-vat-return

Section 7.5

Though its not clear from the HMRC form that this is the case! So now I have to go back over my previous returns and check them - My accounts advice was wrong (I assume he doesn't realise that I went onto the FRS... either that or I need to change accountants)

[northernladuk]

Freeagent does it all and you just have link it to your gateway account. Happy days