VAT FRS - dropping out when invoices > £150k

[Lumiere]

"when invoices > £150k" is not the same as "annual turnover limit of £150k" , you need to remove VAT from invoices to get the turnover figure

[Stag Cozier]

I thought if you sub contracted work out and you are on FRS, the 2k vat claim back rule still applied?

Only applies when you are buying equipment not services.

[ribble]

I thought if you sub contracted work out and you are on FRS, the 2k vat claim back rule still applied?

[DrEvil]

I've just this week withdrawn from FRS on the advice of the accountant. Not because of the 225k limit but because I've just sub-contracted some work out and I will be paying way too much in VAT on the sub-contract to make staying in worthwhile.

You can always re-join FRS providing 12 months have passed since withdrawing if you need to get back on it.

[rmmc]

I believed you would have to drop out of the scheme but according to HMRC's website (extract below) you can remain in it until your turnover reaches £225k.

You remain in the scheme if you wish until you turnover breaches £225 at anniversary of start date. Here is a link to vat notice 733 Section 12, when must I leave the scheme.

HTH

[Fred Bloggs]

That's good news. Bloggs Ltd will just about breach £150k this year if the gig runs as long as I hope. Happy days

[Sally BFCA]

I have updated the other thread to reflect this.
Thanks for pointing it out ChimpMaster.

[malvolio]

Only because of what Wikir Man mentioned in another thread:-

http://forums.contractoruk.com/busin...-advice-2.html

So just searching for the truth!

He's wrong. You stay in, if you really want to, until you hit the upper limit when you have to pull out. The idea is to cover occasional bursts of good business.

[northernladuk]

So just searching for the truth!

On here?? Good luck with that!!

[ChimpMaster]

Sadly, no. But what's the confusion? Seems pretty clear.

Only because of what Wikir Man mentioned in another thread:-

http://forums.contractoruk.com/busin...-advice-2.html

So just searching for the truth!

[VectraMan]

Sadly, no. But what's the confusion? Seems pretty clear.

[ChimpMaster]

Has anyone here been on the FRS but then ended up breaching the annual turnover limit of £150k?

I believed you would have to drop out of the scheme but according to HMRC's website (extract below) you can remain in it until your turnover reaches £225k.

Also awaiting response from my accountant.


From HRMC website:-

Who can join the Flat Rate Scheme
You can join the Flat Rate Scheme for VAT and so pay VAT as a flat rate percentage of your turnover if:

•Your estimated VAT taxable turnover - excluding VAT - in the next year will be £150,000 or less. Your VAT taxable turnover is the total of everything that you sell during the year that is liable for VAT. It includes standard, reduced rate or zero rate sales or other supplies. It excludes the actual VAT that you charge, VAT exempt sales and sales of any capital assets.
Generally you don't reclaim any of the VAT that you pay on purchases, although you may be able to claim back the VAT on capital assets worth more than £2,000 - see the section in this guide on claiming back VAT on capital assets for the rules and restrictions.

Once you join the scheme you can stay in it until your total business income is more than £225,000