flat rate vat scheme thinghy
Discussion
This link might be of use.. http://customs.hmrc.gov.uk/channelsPortalWebApp/ch...
Does the extra one percent for the first year still apply to newly VAT registered companies?
Does the extra one percent for the first year still apply to newly VAT registered companies?
Easy to correct - go back and look at the returns where you inadvertantly included interest received.
Add up the interest amounts included in error. Work out the VAT content of the interest.
When preparing your next return, deduct the total interest amount from your VAT Inclusive Outputs (Box 6 on the return). Deduct the VAT content from the VAT you are going to declare and pay over for this VAT return.
May I ask - why did you think interest received should be included?
Did your accountants not spot this?
Add up the interest amounts included in error. Work out the VAT content of the interest.
When preparing your next return, deduct the total interest amount from your VAT Inclusive Outputs (Box 6 on the return). Deduct the VAT content from the VAT you are going to declare and pay over for this VAT return.
May I ask - why did you think interest received should be included?
Did your accountants not spot this?
I run an IT business and switched to the Flat rate scheme last year (13%) after working out that it will save around £600 per year. No much but when the calculations / accounts are all the same i'd sooner see it in my pockets than the big fella's
Easy to work out over say the previous year based on your returns..
Easy to work out over say the previous year based on your returns..
It is OK but there are a number of dangers inherent in the operation of the Flat Rate Scheme:
i) you MUST ensure you select the correct rate for your business. The definitions shown in the listings are a bit vague in some areas
ii) the Flat Rate may not be appropriate or easy to use if you carry out a number of different activities or sell different types of goods and services. This could be disastrous if the VAT people disagree with how you have arrived rate you are using.
iii) the VAT return itself is not worded correctly for Flat Rate users. Following the instructions on the return itself guarantees you complete an incorrect return.
i) you MUST ensure you select the correct rate for your business. The definitions shown in the listings are a bit vague in some areas
ii) the Flat Rate may not be appropriate or easy to use if you carry out a number of different activities or sell different types of goods and services. This could be disastrous if the VAT people disagree with how you have arrived rate you are using.
iii) the VAT return itself is not worded correctly for Flat Rate users. Following the instructions on the return itself guarantees you complete an incorrect return.
JustinP1 said:
ginettag27 said:
I guess they don't have that many flat rate VAT business to warrant the cost (to them!) to re-print the forms or create a new one..
I guess they just can't be arsed. 
Eric, I'm very confused about a VAT issue. Basically I submitted some company expenses to an agency for some contract work, I am VAT registered. These expenses would be reimbursed to my company and then I would claim my out of pocket expenses back from my Co. Thats all fine, but the agency have paid the expenses back and applied a blanket VAT rate. I.e. the expenses were for 100 pounds. They've paid me 117.50. This can't be right surely. Not least of all because some of the expenses were incurred overseas.
I've spoken to the agent and the not so clever contact there said 'computer says' and 'computer adds' so I'm no wiser there.
What do you reckon?
I've spoken to the agent and the not so clever contact there said 'computer says' and 'computer adds' so I'm no wiser there.
What do you reckon?
Whatever you charge your customers, you should charge VAT on that bill. It doesn't matter if the bill you submitted to your customer is your normal fee or is an attempt by you to recover costs incurred by you.
Even if the cost you wish to recover from your customer did not have VAT on it when you incurred it ( foreign expenditure, rail fares, postage etc) the fact that YOUR business is VAT registered means that YOU need to charge VAT on the bills you submit to recover those costs.
Therefore, if you wanted to "reclaim" a train fare of £100 from your client, you would need to raise a sales invoice for £100.00 plus £17.50 VAT.
Please note that employees claim expenses. Businesses charge their customers.
Have you spoken to your accountant about this issue?
Even if the cost you wish to recover from your customer did not have VAT on it when you incurred it ( foreign expenditure, rail fares, postage etc) the fact that YOUR business is VAT registered means that YOU need to charge VAT on the bills you submit to recover those costs.
Therefore, if you wanted to "reclaim" a train fare of £100 from your client, you would need to raise a sales invoice for £100.00 plus £17.50 VAT.
Please note that employees claim expenses. Businesses charge their customers.
Have you spoken to your accountant about this issue?
Edited by Eric Mc on Tuesday 8th April 21:59
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