Flat Rate VAT

adypem

I have just form Ltd company and I have registered for the flat rate vat scheme. Can I still trade and submit invoices to the client with VAT if I haven't had the paper work back from the VAT man ?

dejongj

Yes you still need to 'collect' the full VAT, you only just not have to pay back to HMRC as much....

Be careful though as I think the difference percentage wise needs to be accounted for a income and thus is actually taxable again....I am verifying this with my accountant at the moment....Then also if you have to stay away from home or generally have a decent level of travel expenses it might actually not be so beneficial to be on flat rate as it seems....Anyway in short the net gain could be a lot less then you think.....

I'm sure you've done your sums, but if not...Do them again so you don't limit yourself

adypem

dejongj wrote: »

Yes you still need to 'collect' the full VAT, you only just not have to pay back to HMRC as much....

Be careful though as I think the difference percentage wise needs to be accounted for a income and thus is actually taxable again....I am verifying this with my accountant at the moment....Then also if you have to stay away from home or generally have a decent level of travel expenses it might actually not be so beneficial to be on flat rate as it seems....Anyway in short the net gain could be a lot less then you think.....

I'm sure you've done your sums, but if not...Do them again so you don't limit yourself

Thanks for that, having had a look at the rate I think its 13% I need to pay, but claim 17.5%. The difference will be going into the reserve account for corporation tax.
In terms of living away I don't do a lot of it, and mileage I do about 300/week, but will be claiming 40p/mile for that.
I'm not too sure that you can claim both VAT and mileage allowance.

The difference with the VAT will be declared (hopefully)

dejongj

If you are on the flat rate scheme you can't claim the VAT portion of the mileage allowance....Though 300/week should be good for about £40ish per month....

BTW I guess you meant Invoice and receive 17.5% and pay 13% (does that include the extra 1% for the first year?).....