Reply to: Flat Rate Scheme VAT rates will be ammended!

[Alf W]

a Post Office surely?

[TheFaQQer]

£4.50 / £1000 ?!!!

This will cost me over £40 a month.

I take back back all the bananas in my OP.

That assumes that you were on 13% and are now on 11.5%

Time to rebrand as a management consultancy rather than IT consultancy

[swamp]

£4.50 / £1000 ?!!!

This will cost me over £40 a month.

I take back back all the bananas in my OP.

[QwertyBerty]

Yes - you're right.

£4.50 worse off for every £1000 of net billing.

Oh well.... at least we save a bit on the FRS on bank interest received

QB.

[TheFaQQer]

I think you owe the tax man some pennies!

Nope - just to get my spreadsheet to be right before posting here

[Bagpuss]

I get a different figure for my calculations...

17.5% VAT, 13% FRS:

Gross billing = 1175
VAT @ 17.5% = 175
Net billing = 1000

FRS payment = 135.1769912

15% VAT, 11.5% FRS:

Gross billing = 1150
VAT @ 15% = 150
Net billing = 1000

FRS payment = 118.6098655

So the difference I get it to be is £8.43 for every £1000 billed (Net)

I think you owe the tax man some pennies!

[TheFaQQer]

I get the following:

...

Difference is you're £4.50 worse off.

Yes - you're right.

£4.50 worse off for every £1000 of net billing.

[dx4100]

Its like watching Countdown

[Hex]

I get a different figure for my calculations...

17.5% VAT, 13% FRS:

Gross billing = 1175
VAT @ 17.5% = 175
Net billing = 1000

FRS payment = 135.1769912

15% VAT, 11.5% FRS:

Gross billing = 1150
VAT @ 15% = 150
Net billing = 1000

FRS payment = 118.6098655

So the difference I get it to be is £8.43 for every £1000 billed (Net)

I get the following:

17.5% VAT, 13% FRS:

Gross billing = 1175
VAT @ 17.5% = 175
Net billing = 1000

FRS payment = 13% * 1175 = £152.75
Net kept after FRS = 1175 - £152.75 = £1022.25

15% VAT, 11.5% FRS:

Gross billing = 1150
VAT @ 15% = 150
Net billing = 1000

FRS payment = 11.5% * 1150 = £132.25
Net kept after FRS = 1150 - £132.25 = £1017.75

Difference is you're £4.50 worse off.

[TheFaQQer]

No. You'll be £4.50 worse off per £1000 invoiced (pre VAT)

I get a different figure for my calculations...

17.5% VAT, 13% FRS:

Gross billing = 1175
VAT @ 17.5% = 175
Net billing = 1000

FRS payment = 135.1769912

15% VAT, 11.5% FRS:

Gross billing = 1150
VAT @ 15% = 150
Net billing = 1000

FRS payment = 118.6098655

So the difference I get it to be is £8.43 for every £1000 billed (Net)

[Pickle2]

No. You'll be £4.50 worse off per £1000 invoiced (pre VAT)

It really depends on how much your company spends on VAT-able supplies. As all of those are now going to be cheaper by 2.5% too. So 4.50 / 1000 is worst case scenario, if you dont spend anything on VAT-able supplies. And if thats the case you can hardly moan about less free money can you?

[Bagpuss]

By my calculation this means you lose out

2k @ 1.175= 2350
2k @ 1.15=2300
0.13 *2300= 305.5
0.115 * 2300=264.5

44.5 under old rates
35.5 under new

I'm tired so I could have got this wrong

[MrRobin]

Does that keep the proportion of monies retained the same?

No. You'll be £4.50 worse off per £1000 invoiced (pre VAT)

[TheFaQQer]

will the reduction in FRS cover everything invoiced during MyCo's last VAT quarter? or do i apply 12% to the gross revenue up until 30/11/08, and 9.5% to everything invoiced after?

Yes - you do the VAT calc depending on the rate that was prevailing when you issued the invoice / received payment depending on your accounting system.

[Moscow Mule]

Not quite - the rates don't all drop by 2.5%.

IT consultancy drops to 11.5%

The rates are in this post.

You'll only pay 10.5% if you are in catering, financial services or hairdressers.

Does that keep the proportion of monies retained the same?