Flat Rate Schema and Bank Interest

[VectraMan]

From that shout99 linky:

I can confirm that bank interest received by a business is treated as exempt income and as such would form part of the flat rate turnover when calculating the VAT due under the flat rate scheme.

I think the word "not" is missing from that statement.

[hgllgh]

I was with PlanIT and they never included it in FRS!

Also, it doesn't make sense. You charge your client VAT for services provided. Bank interest does not have VAT applied in any way shape or form?

[Jaded]

I cannot see how VAT would be due on interest, as someone has already said, VAT is not charged on interest in the first place.

[Lewis]

See this thread

http://forums.contractoruk.com/accou...-question.html

Ahh, that's the one I was looking for earlier! My accountants say not to include bank interest so I'll follow their advice .... odd that QDOS were told otherwise though.

[Archangel]

See this thread

http://forums.contractoruk.com/accou...-question.html

[Hex]

I talked to my accountant about this a year or so ago and he said not to include it.

There have also been various discussions on bulletin boards about this. From what I can remember you can get different interpretations of whether its included or not even from HMRC.

[Lewis]

Send the above link to your current accountants and SJD. Ask them to explain why there's a discrepancy.

I'll certainly mail my current accountants just wondered what everyone else does. I can't find the long thread where loads of people told the poster who had included his bank interest that he was wrong! But I found this ...

http://forums.contractoruk.com/accou...light=interest

[Lewis]

Was doing my SJD spreadsheet yesterday and there is a column for bank interest in it. Whether they use that in the FRS calculation bit I have no idea.

It didn't have any effect to the FRS amount as far as I could tell.

[oracleslave]

I also have an old SJD spreadsheet and that appears to ignore bank interest as well as far as I can see.

Any thoughts?

Was doing my SJD spreadsheet yesterday and there is a column for bank interest in it. Whether they use that in the FRS calculation bit I have no idea.

[Chugnut]

Send the above link to your current accountants and SJD. Ask them to explain why there's a discrepancy.

[Lewis]

What do people make of this ...

http://www.shout99.com/contractors/s...;id=51209;n=10

QDOS say you must put bank interest down when calculating Flat Rate VAT and enclosed text from an HMRC letter they were sent on the subject.

There was a thread a while ago where the concensus was you -don't- put down bank interest when calculating FRS. My accountants have never mentioned ban k interest, I also have an old SJD spreadsheet and that appears to ignore bank interest as well as far as I can see.

Any thoughts?