Vat flat Rate Scheme and MTD questions
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Bmwm3gt2
Posts: 276 Forumite
Hi, my partner is considering going VAT registered on the flat Rate Scheme, she is below the mandatory threshold to register but as she has approximately £50k of assets she could claim VAT back on and approximately 90% of her turnover is to VAT registered businesses she thinks it would be of benefit to her. She is aware that the flat Rate Scheme would be 10% for her as she runs a chauffeur service but the questions are:
As she would be below the £85k threshold would she need to be MTD compliant from April?
As it takes around a month for the VAT number etc from registration how would she invoice innthat month or so? I'm sure I have seen that she needs to add 20% to the invoices so the total is correct and the reissue invoices once she has the VAT number showing VAT total and number. E.g. if the invoice was £500 she would do it initially for £600 but not showing VAT and the upon getting the number reissuing it for £500+£100VAT?
What details will she need to register online, assuming you can if you want the flat Rate Scheme?
Also any other information you think she would be better off knowing?
Many thanks.
As she would be below the £85k threshold would she need to be MTD compliant from April?
As it takes around a month for the VAT number etc from registration how would she invoice innthat month or so? I'm sure I have seen that she needs to add 20% to the invoices so the total is correct and the reissue invoices once she has the VAT number showing VAT total and number. E.g. if the invoice was £500 she would do it initially for £600 but not showing VAT and the upon getting the number reissuing it for £500+£100VAT?
What details will she need to register online, assuming you can if you want the flat Rate Scheme?
Also any other information you think she would be better off knowing?
Many thanks.
0
Comments
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OK, so in HMRC speak a taxi service - car with driver. Remind her that if she does register she still has to meet the criteria for not being converted to a limited cost trader, ie she must spend >£250 per VAT quarter on the purchase of goodsHi, my partner is considering going VAT registered on the flat Rate Scheme, she is below the mandatory threshold to register but as she has approximately £50k of assets she could claim VAT back on and approximately 90% of her turnover is to VAT registered businesses she thinks it would be of benefit to her. She is aware that the flat Rate Scheme would be 10% for her as she runs a chauffeur service
shouldn't be a problem if she is a taxi service since there is a specific exception for that type of business which means the fuel purchased is treated as goods (not allowed for anyone else)
https://www.gov.uk/government/publications/tackling-aggressive-abuse-of-the-vat-flat-rate-scheme-technical-note/tackling-aggressive-abuse-of-the-vat-flat-rate-scheme-technical-note
NoAs she would be below the £85k threshold would she need to be MTD compliant from April?
https://www.gov.uk/government/publications/vat-notice-70022-making-tax-digital-for-vat/vat-notice-70022-making-tax-digital-for-vat
"2.1 Turnover test (exemption on the grounds of taxable turnover)
.... Only businesses with taxable turnover that has never exceeded the VAT registration threshold (currently £85,000) will be exempt from Making Tax Digital. You will therefore need to keep an eye on your taxable turnover, especially if you think it is close to the VAT registration threshold."
presumably you have read the guide since you are effectively quoting it?As it takes around a month for the VAT number etc from registration how would she invoice innthat month or so? I'm sure I have seen that she needs to add 20% to the invoices so the total is correct and the reissue invoices once she has the VAT number showing VAT total and number. E.g. if the invoice was £500 she would do it initially for £600 but not showing VAT and the upon getting the number reissuing it for £500+£100VAT?
https://www.gov.uk/vat-registration
"While you wait
You can’t charge or show VAT on your invoices until you get your VAT number. However, you’ll still have to pay the VAT to HMRC for this period.
You should increase your prices to allow for this and tell your customers why. Once you’ve got your VAT number you can then reissue the invoices showing the VAT."
tell her to read the .Gov / HMRC webpages....What details will she need to register online, assuming you can if you want the flat Rate Scheme?
https://www.gov.uk/vat-registration
use a bookkeeper or accountant who knows what they are doing with VAT until she has learned about it herself?Also any other information you think she would be better off knowing?0 -
Thank you for taking the time to reply. Everything you say makes sense. Also regarding charging VAT value and reinvoicing later, I was convinced I had seen it on the website but then I couldn't find it again!0
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I sorry but I have 1 more question. When you choose the start date e.g. 1 December do you charge vat on all invoices raised from that date, which would include services before the date, or services taken from that date? Thanks0
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I sorry but I have 1 more question. When you choose the start date e.g. 1 December do you charge vat on all invoices raised from that date, which would include services before the date, or services taken from that date? Thanks
It all depends on the tax point
https://www.gov.uk/vat-record-keeping/time-of-supply-or-tax-point0
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