In the majority of cases turnover is shown as excluding VAT. If you are registered for the VAT Flat Rate Scheme you may show details of your business income and allowable expenses, either:
• all net of VAT (that is, with the VAT figure taken off)– method 1, or
• all inclusive of VAT – method 2 with other expenses including the vat payments.
Accounts must include income that has been earned but not received.
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Previously on "Taxable Turnover - Does this include in VAT"
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Originally posted by slackblokeBefore I completely lose control with my accountant can someone please confirm whether or not VAT is included in taxable turnover? I can't believe it is but I want check (it has been included in the draft end of year accounts prepared by my accountant).
Also what is the last revenue that can be included in the accounting year? Is the last invoice dated within the year, or the last last invoice paid or the last piece of work completed?
Any answers much appreciated.
The date the invoice gets paid isnt relevant to which accounts it goes in. It will just sit on your accounts as a debt to the company, as opposed to cash in the bank. If you did the work in January, you invoice monthly on say the 3rd Feb and your accounting date is 31st Jan, then the January income would go into that years accounts. Even though the money wasnt in at the time. Thats the way my accoutnant plays it anyway.
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General rule, VAT is not your money, you are merely holding it for HMG. It is not part of your turnover - unless you're on the FRS, when the difference between the 17.5% you charge and the 13% you pay is treated as company income (and so taxed accordingly). If your accountant hasn't explained that, or doesn't believe it to be true, get another accountant, 'cos this one will put you in jail.
Final revenue can be done two ways, either when the cash hits the bank account or when the invoice is raised. In the latter case, you have to create an accrual entry in the next period to offset the invoice value, which is all a bit OTT for a small transaction business like ours, so far safer to work on cash accounting. Makes the VAT easier as well. And again, your accountant should be doing this for you.
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Taxable Turnover - Does this include in VAT
Before I completely lose control with my accountant can someone please confirm whether or not VAT is included in taxable turnover? I can't believe it is but I want check (it has been included in the draft end of year accounts prepared by my accountant).
Also what is the last revenue that can be included in the accounting year? Is the last invoice dated within the year, or the last last invoice paid or the last piece of work completed?
Any answers much appreciated.Tags: None
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