VAt Return : Flat Rate Scheme Box 6 value?

[SueEllen]

HMRC do tend to randomly check VAT returns.

I know.

I've met a few contractors who have had their VAT checked.

The majority were fine as their mistakes were over paying rather than underpaying, but one had really screwed up.

[css_jay99]

HMRC do tend to randomly check VAT returns.

They sent a letter querying a VAT Return to my client relating to a couple of years ago. They asked why box 6 was not the figure they were expecting when compared to box 1, 3 & 5 on a particular return (flat rate).

It was a very straight forward enquiry, but they do carry out random checks.

A good thing I can argue that the wording on box 6 says net instead of gross .....

Just hope it does not turn into an IR35 investigation! ....

[Nathan SJD Accountancy]

Still waiting for my inspection letter.....

Mind you I did sign up for a VAT course and went immediately after I realised I had done it wrong.

HMRC do tend to randomly check VAT returns.

They sent a letter querying a VAT Return to my client relating to a couple of years ago. They asked why box 6 was not the figure they were expecting when compared to box 1, 3 & 5 on a particular return (flat rate).

It was a very straight forward enquiry, but they do carry out random checks.

[SueEllen]

By putting the gross in box 6 it allows them to easily see Box 6 x 14.5% = box 1. Yours will suddenly show a different percentage, which may raise a flag.

Still waiting for my inspection letter.....

Mind you I did sign up for a VAT course and went immediately after I realised I had done it wrong.

[css_jay99]

By putting the gross in box 6 it allows them to easily see Box 6 x 14.5% = box 1. Yours will suddenly show a different percentage, which may raise a flag.

It does not appear they have been looking for the last 6years because since I have been incorrectly using net sales figure in box6, i would have thought they should have been writing me a letter that I am paying too much VAT since my Box 6 x 14.5% was always less than my Box1 figure

[Clare@InTouch]

It may equally well not raise a flag as I can imagine its such a common error they accept both 14.5% of box 6 and 17.4% of box 6.

I guess the best approach is to not change the way you fill the form in until told otherwise or you change your agent / accountant.

Agreed - I mention it only because I've seen it happen.

I'd still recommend you change the way you do it to the proper way though, otherwise an innocent error becomes a deliberate one. If you have nothing to hide, then there's no fear involved in them asking what the score is anyway.

[eek]

Keep in mind that when you correct the way you do it next quarter HMRC may well notice and ask you to explain yourself. It should be a simple case of saying "D'oh, sorry - here's my returns and what should have been declared" and that'll be an end to it.

By putting the gross in box 6 it allows them to easily see Box 6 x 14.5% = box 1. Yours will suddenly show a different percentage, which may raise a flag.

It may equally well not raise a flag as I can imagine its such a common error they accept both 14.5% of box 6 and 17.4% of box 6.

I guess the best approach is to not change the way you fill the form in until told otherwise or you change your agent / accountant.

[Clare@InTouch]

cheers.

, I have always been putting into box 6 the net Value(i.e. Exclusive of 20%VAT) for the last 6 years!.

Though Box 1 figure is correct it's strange they never pulled me up on that !.

I am assuming I don't need to start making correction cos 6yrs is a long way to go

css_jay99

Keep in mind that when you correct the way you do it next quarter HMRC may well notice and ask you to explain yourself. It should be a simple case of saying "D'oh, sorry - here's my returns and what should have been declared" and that'll be an end to it.

By putting the gross in box 6 it allows them to easily see Box 6 x 14.5% = box 1. Yours will suddenly show a different percentage, which may raise a flag.

[Jeremiah@RHJAccountants]

I agree with the other accountants that have already posted

and HMRC have not updated their forms for VAT return box 6 now there is a surprise

[css_jay99]

If you're flat rate then it's the gross value that goes in box 6, not the net.

HMRC just haven't updated their online forms.

cheers.

, I have always been putting into box 6 the net Value(i.e. Exclusive of 20%VAT) for the last 6 years!.

Though Box 1 figure is correct it's strange they never pulled me up on that !.

I am assuming I don't need to start making correction cos 6yrs is a long way to go

css_jay99

[Nathan SJD Accountancy]

If you're flat rate then it's the gross value that goes in box 6, not the net.

HMRC just haven't updated their online forms.

I agree with Clare.

P.S. I don't think HMRC will ever update the VAT Returns for the flat rate box 6 though.

Seems like Waaaayyy too much effort for them to do that.

[Clare@InTouch]

If you're flat rate then it's the gross value that goes in box 6, not the net.

HMRC just haven't updated their online forms.

[css_jay99]

I am getting myself in a bit of a mix up and need some clarification.


The HMRC Online filing for VAT shows a descriptive text for Box 6 as "Total value of sales and all other outputs excluding any VAT..."


However this hmrc link suggests otherwise that Box 6 should include VAT

Which is correct ?

figures for illustration :-

Assume industry flat rate percentage of 14.5%
Assume Sales for Return period is £12000 i.e. (£10000 + £2000 of VAT)

I would expect Box 1 figure to be £1740 ( i.e. 14.5%*12000)
I would expect Box 6 figure to be £10000 instead of £12000

which value is right is box6 ?

cheers

css_jay99