Reply to: VAT reduced to 15%

[expat]

OK, I'll try another one:

at the end of next year, whan VAT goes back up again, the price of everything will go up, won't it?

See, I was half right.

[Purple Dalek]

Absolutely, because the price of everything will go down because of this VAT cut.

Won't it?

Ha ha ha ha ha

bonk

The naiveté of the young, isn't it wonderful.

[expat]

But you will be spending less on VAT too.

Absolutely, because the price of everything will go down because of this VAT cut.

Won't it?

[dx4100]

Seeing as you have to specify your 'industry' to qualify for the FRS, am I the only one who sees it as yet another way HMRC can track the 'tax dodging' service companies, especially now the IR and C&E have merged?

My Ltd has always been classed as retail (and a few other categories), but nothing specifically to do with IT. So far no problems, they're too busy chasing the numpties that put 'IT', 'Services', or 'Consultancy' in their company name.

like me

[PAH]

Seeing as you have to specify your 'industry' to qualify for the FRS, am I the only one who sees it as yet another way HMRC can track the 'tax dodging' service companies, especially now the IR and C&E have merged?

My Ltd has always been classed as retail (and a few other categories), but nothing specifically to do with IT. So far no problems, they're too busy chasing the numpties that put 'IT', 'Services', or 'Consultancy' in their company name.

[TheFaQQer]

http://www.hmrc.gov.uk/pbr2008/pbrn26.pdf

FRS rates are coming down in line with the headline VAT rate.

almost in line, or not at all, depending on your industry

[Alf W]

Looks like they will be making the changes for FRS.

Oh do keep up at the back please!

http://forums.contractoruk.com/697997-post10.html

[PAH]

I do my VAT calculation four times a year

We all do, it's quarterly!

VAT is the easiest tax to calculate ever. Even simpler for those of us on monthly invoicing. I tend to reclaim quite a lot over a year, anything remotely IT related in fact, including my big LCD TV, er, monitor, so the FRS doesn't appeal to me. Each return takes me under 30 mins to work out, so no biggie.

I'm with you on the expenses though. Having to record all the milage is a pain, but knowing it's reducing my tax bill is what keeps me going.

I laughed when watching the early evening news. They had a few 'jo publics' giving their verdicts, and they all gave the thumbs down. Almost as funny as Labour deferring all the tax increases till after the next election, probably expecting the cons to walk it, and take all the flak.

[OrangeHopper]

But your accountant has to work out the Flat Rate Saving at the year end so someone still has to do the calculation.

[TheFaQQer]

Nah. It's not going to cost any more, just profit a bit less. For me not working out inputs and outputs makes staying on it a no-brainer.

WHS - I do my VAT calculation four times a year, and all my expenses at year end because I'm so bad with filing.

FRS is a dream for me

[Starkraving]

Sneaky!

From the HMRC web site:



"My flat rate has not been reduced. Why not?"

The flat rate percentages are calculated by reference to the VAT actually paid in each sector and, following the change to the standard rate of VAT, most sectors will find that their flat rates are reduced. However, there are a small number of sectors that, with VAT at 17.5%, would have needed an increase in order to reflect the correct underlying rate for that sector. Following the rate change to 15%, those sectors have been left unchanged rather than increased.

I've noticed that my sector has been reduced by 2% instead of 2.5%

[Pickle2]

they gain again
old scheme
Invoice £1000 keep £22.25 of tha vat for yourself

now
Invoice £1000 keep £17.75 of tha vat for yourself

get yer invoices out on Friday

But you will be spending less on VAT too. If you invoice 1000, spend 100 inc vat on supplies, then there is another 2.50 (ish) you save. so your 17.75 should really be 20.25.

And if you dont spend much on supplies then FRS shceme is just free money anyway, so there is nothing to moan about.

[Moscow Mule]

Surely the benefits of the FRS were marginal at best and this will push more people out of the FRS and back to the old way.

Nah. It's not going to cost any more, just profit a bit less. For me not working out inputs and outputs makes staying on it a no-brainer.

[BoredBloke]

Surely the benefits of the FRS were marginal at best and this will push more people out of the FRS and back to the old way.

[kryten22uk]

they gain again
old scheme
Invoice £1000 keep £22.25 of tha vat for yourself

now
Invoice £1000 keep £17.75 of tha vat for yourself

get yer invoices out on Friday

Even worse for my category (Other Business Services); i've gone from £45.75 to £40.75.