Reply to: The Flat Rate Vat Scheme

[Gonzo]

Remember the expenses.

Good point. I choose to live in a location that is easily commutable to where most of my contracts are going to be (and I can't expense travel anymore ) so myCo's expenditure is minimal, but I appreciate that that is not the case for everyone.

[VectraMan]

Remember the expenses. Stay in hotels, or do a lot of mileage and you could be worse off. The reason I haven't been in a rush to join is because with the mileage I do I'm only going to be about £20 per month better off under FRS.

[Gonzo]

So when your on this VAT scheme is there such a thing as reclaiming the VAT paid for goods that you purchased for the company, I.E. a laptop?

Yes, if it is an expensive one, i.e. a single item > £2000.

The idea of the scheme is to simplify the whole VAT thing so you don't have to account individually all the VAT paid against the VAT charged to work out the total. Actually not a bad idea from HMRC and an easy decision for most of us (I was about to type "no-brainer" but thought better of it).

[ndoody]

So when your on this VAT scheme is there such a thing as reclaiming the VAT paid for goods that you purchased for the company, I.E. a laptop?

[Bluebird]

I think I may have missed a trick here. Is the percentage definitely applied to the VAT inclusive turnover, not the net turnover?

There is a small saving to be made if so, and I've paid too much VAT.....

you apply your VAT FR % to the turnover [ invoice + vat charged ].

ie if you invoice 10k and the VAT is £1750, then you apply your FRS rate [ say 12.5% ] to the 11750, which means you pay HMRC £1468.75.

That gives you a profit of £281.25, but of course you have to pay CT on that [ @20% ] leaves you with £225 in your pocket.

Cushty.

[ardent1]

I think I may have missed a trick here. Is the percentage definitely applied to the VAT inclusive turnover, not the net turnover?

There is a small saving to be made if so, and I've paid too much VAT.....

[TheFaQQer]

All I can say about this VAT and FRS nonsense and queues and waiting times and stuff is praise the Lord that I did all that years ago. And had almost instantaneous registration for both.

Just how many of you set up your company in the last 4 months or so? And why didn't you set it all up before?

But then it is also the fault, I guess, of HMRC becaue they did not predict the increase in applications when MSC legislation came in in April and increased the number of staff to deal with it.

Hey ho, one day, hopefully, they'll learn....

When I did FRS registration, I did it over the phone - no problems, had a confirmation letter a month later, but had already been told it was done.

I guess the MSC stuff has made company registration and VAT registration a lot harder to process, hence all the farting about with asking for contracts, business plans, etc. etc. - anything that sets the status to "waiting for customer" and gets it out of their hair into yours is a plan worth following!

[miss marple]

All I can say about this VAT and FRS nonsense and queues and waiting times and stuff is praise the Lord that I did all that years ago. And had almost instantaneous registration for both.

Just how many of you set up your company in the last 4 months or so? And why didn't you set it all up before?

But then it is also the fault, I guess, of HMRC becaue they did not predict the increase in applications when MSC legislation came in in April and increased the number of staff to deal with it.

Hey ho, one day, hopefully, they'll learn....

[Jason D]

Ok, for anyone who's interested. I have double checked on this.

I just called 0845 010 9000 and there is absolutely no way you can register for Flat Rate VAT on the phone. All you can do is APPLY on the phone. Your application will then be considered and you will be notified if successful. You cannot apply Flat Rate VAT rules on VAT returns until you have received notification of acceptance.

There is a big back log at the moment but the good news is that you can apply normal VAT whilst awaiting FRS acceptance and then put in an adjustment after you've been accepted so you won't miss out on anything. (assuming you FRS start date is the same as you normal VAT start date).

I think that you misunderstood but probably my fault for not being clearer.

You are right, the application is made over the phone, it is then sent to the same department that deals with all registrations, and we all know how swamped they are. The FRS registrations though are less onerous for them to proccess though and will therefore be done quicker. The delays are much more of a problem for standard registration.

You agree the date over the phone as you would for a paper based registration. You then apply the FRS to your accounts. In the event that you do not recieve the confirmation by the end of your 1/4 then you hand over the VAT in the usual way and then make an adjusting claim as you say. Obviously it is possible that you application will be denied, but in practice that is unlikely.

So, phone them up, apply, account using the FRS from agreed date, if not confirmed by end of quarter then pay as per the usual scheme. If you do this at the start of your VAT quarter then you have four months to get the confirmation before you hand over the VAT thus negating all this in the vast majority of cases.

[Lewis]

Ok, for anyone who's interested. I have double checked on this.

I just called 0845 010 9000 and there is absolutely no way you can register for Flat Rate VAT on the phone. All you can do is APPLY on the phone. Your application will then be considered and you will be notified if successful. You cannot apply Flat Rate VAT rules on VAT returns until you have received notification of acceptance.

There is a big back log at the moment but the good news is that you can apply normal VAT whilst awaiting FRS acceptance and then put in an adjustment after you've been accepted so you won't miss out on anything. (assuming your FRS start date is the same as you normal VAT start date).

[Lewis]

Just ring the VAT line 0845 010 9000 - they will take your details, agree the date and send you confirmation by post (take a reference).

I have done two already this week and had no problem, but then again I am a charmer

This doesn't make sense to me. I did *exactly* that. I have the reference number for the call but that does not mean you have been approved. The application then goes to the FRS office who are processing applications from June at the moment. Once your application has been approved it takes about a week to get the approval letter. My accountant says there is no way to short circuit this as does the FRS office who I have phoned many times. Are you sure you haven't just made an application for two people as opposed to them having been approved?! How long has it taken for your postal confirmation? I don't think you are legally allowed to pay Flat Rate VAT without having been officially approved, the application could in theory be rejected.

Is there anyone else out there who can clarify!

[Jason D]

Frs

Just ring the VAT line 0845 010 9000 - they will take your details, agree the date and send you confirmation by post (take a reference).

I have done two already this week and had no problem, but then again I am a charmer

[Lewis]

Yep, if you are already VAT registered then ring them up and they will put you on the FRS scheme starting in your current quarter.

As stated above, the delays are for registration, not for transferring onto flat rate.

Hmmmm ... this is not my experience. What is the number for this immediate service?! I have the following numbers for the Flat Rate Scheme office 01472 247 376/378/382. They can't contain their laughter when I suggest it's possible to join immediately. Thay have a massive backlog. I am already VAT registered.

[Lewis]

I think the queue is to get VAT registration in the first place. Once done, swap onto the FRS is a phone call - or so I've read in previous threads!

I have been calling the FRS office every week to chase my application which was placed over the phone with them in July. They are still processing mid-June applications.

[Jason D]

Are you sure? I shall try that as a last resort when the quarter is nearly up.

Yep, if you are already VAT registered then ring them up and they will put you on the FRS scheme starting in your current quarter.

As stated above, the delays are for registration, not for transferring onto flat rate.