Hand with flat rate VAT

Freak

Freak

Is it still summer?
I'm hoping someone out there can give me a hand with flat rate VAT, I recently went from a permanent position back to contracting and had to start another business (long story).

Anyway I registered for flat rate VAT but unbeknown to me I now fill out the returns on-line which has changed since my last business, so I've registered and I still don't understand the guidelines that HMRC publish so I've taken two steps forward and one step back, I can speak to my accountant but no doubt they'll want to charge me for the privilege, once I've completed it once I'll be fine.

Anyone done this?

Thanks in advance
 
I will have a craic with my mate later, he is Flat Rate, he uses an accountant though so may not be much help. Will get him to give you a call if I manage to catch up with him !
 
Freak said:
I'm hoping someone out there can give me a hand with flat rate VAT, I recently went from a permanent position back to contracting and had to start another business (long story).

Anyway I registered for flat rate VAT but unbeknown to me I now fill out the returns on-line which has changed since my last business, so I've registered and I still don't understand the guidelines that HMRC publish so I've taken two steps forward and one step back, I can speak to my accountant but no doubt they'll want to charge me for the privilege, once I've completed it once I'll be fine.

Anyone done this?

Thanks in advance
Click to expand...

What exactly is it that you are struggling with?
HMRC never documented how to complete the vat return for flat rate vat very well but i finally found a document which gives an explanation of how to fill it in for flat rate vat.

fortunatley i went from the paper form straight to online so i could compare them easily.

pm me your email and i'll try to help if i can.
 
If you're a mostly service provider with little in the way of purchases it's a winner.

You charge your clients x amount pus vat @ 17.5% (20% from 04/01/2011) after that :comp2::confused:
You pay vat at a fixed rate 13% I suspect in your case.
You can join if your turnover is <£150k and stay in until your turnover is up to £225k

What you don't do is offset your vat liability against any vat incurred ( but I think Vat on capex over 2k can be reclaimed).

I think the best way to look at it is that you get pocket the difference between the 17.5% you charged - the 13% you pay.
So view it a the Vat man giving you a cut :)

Plenty of info here. http://www.hmrc.gov.uk/vat/start/schemes/flat-rate.htm
 
And make sure you calculate your VAT payment on Gross, not Nett..

So, if you've invoiced for £10k+VAT, then your FRS VAT payment will be 13% of £11750 (£227.50).


I made this mistake when I went FRS, and built up an upsettingly large bill.
 
I've been on the flat rate since it started. The % you pay is related to the type of business you're in. I'm 7.5% , which is going up 1%, so I'm still quids in.
Arj is right, on larger purchases, like a new van, you can claim the vat back. My accountant sends me the figures and I do the return on-line.
If I can do it , anyone can :) You can check what % your business type would pay....here http://vatreadyreckoner.hmrc.gov.uk/
 
Ended up speaking to my accountant in the end and getting charged for the priviledge but as has been said above it's not very well documented on what you need to pay and how to complete the VAT return as it's the same form that I was using years ago.

Rendo PM on it's way thanks!
 
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