Is this calculation wrong? Flat rate VAT

[All that jazz]

http://www.malcolmcoles.co.uk/blog/flat-rate-vat-s...

Blurb said:

In box 1, you enter the amount of VAT you owe. So that's your income, including VAT, mutiplied by your FRVS rate. So if you had income of £12,000 INCLUDING VAT, and your FRVS rate was 10%, you would enter £1,200 here.

Now I don't claim to be an accountant or mathemathics wizard, that's why I pay someone to do all of my accounting except the VAT, but surely the above is wrong?

If you are entering your total amount including VAT then if your FRVS rate is 10% surely the amount you owe is actually £1000 not £1200 because your total income is actually £10000 before VAT?

I'm wondering if all my VAT filings have been wrong now! I only stumbled on this by chance earlier but whilst working out some figures for my latest month I had a total figure including VAT of £5494.20 but have charged a VAT total of £915.70 for that period (charging VAT at 20%, 10% FRVS rate). If I follow his advice and file my VAT as 10% of my total including VAT then that would obviously be £549.42 but 10% of my total before VAT is actually only £457.85.

Clarification welcome please!

[jamesh764]

Flat rate VAT is calculated on the gross figure, so if your sales were £10k+VAT, and your Flat Rate percentage was 15%, then you should be paying 15% of £12k, i.e. £1800.

[Eric Mc]

Also, you ALWAYS show your VAT INCLUSIVE sales in the relevant Outputs Box on the VAT return. This is different to those who are under the normal VAT rules, who only show their VAT EXCLUSIVE sales.

[sumo69]

All that jazz said:

If you are entering your total amount including VAT then if your FRVS rate is 10% surely the amount you owe is actually £1000 not £1200 because your total income is actually £10000 before VAT?

I'm wondering if all my VAT filings have been wrong now! I only stumbled on this by chance earlier but whilst working out some figures for my latest month I had a total figure including VAT of £5494.20 but have charged a VAT total of £915.70 for that period (charging VAT at 20%, 10% FRVS rate). If I follow his advice and file my VAT as 10% of my total including VAT then that would obviously be £549.42 but 10% of my total before VAT is actually only £457.85.

Clarification welcome please!

Your VAT payable in box 1 should have been £549.42 - perhaps the Accountant should have done the VAT as well?? Having said that, I review the FRS returns when preparing annual accounts for clients- does yours??

David

[All that jazz]

Thanks all. Yes, £549 is indeed correct and my accountant actually replied to me today to confirm I'm doing it right. The confusion arose because there are a few sources online that state it's the % of your earnings, not a % of your earnings + the vat and that's what caused me to stop and query it.

[Olivera]

All that jazz said:

If you are entering your total amount including VAT then if your FRVS rate is 10% surely the amount you owe is actually £1000 not £1200 because your total income is actually £10000 before VAT?

No. The example is correct.

It would be useful if people running flat rate VAT registered limited companies had the slightest clue how the system operates.