Nett + VAT breakdown in Expenditure

[edmolyneux]

Flat Rate Scheme

If you are on the flat rate scheme unless something costs a lot (can't remember the figure have a look on HMRC webpages) you don't need to break it down.

It's £2000 including VAT, but that doesn't need to be a single item (so if you buy laptop plus printer plus software for example all together that counts).

The HMRC reference is here.

If you're nearing the £2000 mark on something you're wanting to buy (for the business) it can be better to upgrade a little to get over the £2000 mark since you'll be able to reclaim 17.5% on the whole amount if you do (but nothing if you don't).

The Flat Rate Scheme does make things much easier for you during the year, but it's a bit harder for your accountant at the end of the year, since you will have extra income from the 'FRS Surplus' - the difference between the VAT you received from your client and what you paid to the HMRC.

@richy: the upshot is yes: only record the gross value of expenses, but you need that extra 'vat' column just in case you do buy something big.

BTW life is too probably too short for you to be spending your time thinking about this! If you're earning enough to be above the VAT threshold it's better to pay an accountant (or use one of the online services out there) to do it instead...

[SueEllen]

If you are on the flat rate scheme unless something costs a lot (can't remember the figure have a look on HMRC webpages) you don't need to break it down.

[richy]

Edit: You are on the flat rate scheme, what analysis column are you talking about ? If I were you just put all the VAT you recieve a side and then every Q do you VAT return and not worry about it.

hi, thx for reply.

yep, so i am on flat rate VAT, and i do return every quarter at 12%.

my question is relating to the "Expenditure" section of my accounts (basically this is a book keeping question).. so do i need to show the breakdown of Nett+VAT in separate columns? Or can I just have a Gross column?

thx. richy

[Bumfluff]

Cant you just apply for flat rate VAT its alot easier, you charge VAT at 17.5% and then pay every quarter 11% or 12% (cant remeber also depends on your business classification) the difference in what VAT you recieve and what you pay the VAT man if effectively the VAT you get back.

Edit: You are on the flat rate scheme, what analysis column are you talking about ? If I were you just put all the VAT you recieve a side and then every Q do you VAT return and not worry about it.

[richy]

hi guys.

a couple of book keeping questions:

I don't know all the different VAT rated products. I know that books have 0%
VAT, but I believe postage has no VAT but "packing" would have VAT on it.

So when I get a receipt for a product which says:

Product: £14.00

^ No Nett+VAT breakdown, how should I enter this? For instance Sainsbury's
subsistence receipt gives no breakdown.. but I suspect Kitkats will have VAT
on them?

The essence of my question is: Does it matter if I get it wrong (Just
entering all £14 as Nett) because there is no breakdown? I am on the Flat
Rate VAT scheme so maybe I don't need to even keep the Nett+VAT breakdown of
the Gross expenditure? If so.. what do I put in my analysis columns..? just
the Gross?

Final question, I ordered a book to take off-site to reference while working
with a client. The invoice says:


VAT no: GB 01234546577
Book unit price: £11.10
Unit shipping: £2.75
Total: £13.85

So no VAT breakdown.. do I just assume there would be VAT on the total?
meaning the Nett was: £11.78, VAT: £2.06, Gross: £13.85

any tips appreciated. thx. richy