Changes to the Flat Rate VAT Scheme (FRS) on 1st April

Hi, for service type business’s the FRS scheme will have its rate increased to a standard 16.5% on the 1st April 2017.
Those on annual VAT accounting FRS will then have 2 rates on their annual Vat return for their accounting year upto 1st April at their current % rate, and for the remaining part of their accounting year the new 16.5%.

How will we do this on QF when on annual accounting where only one vat return is submitted and QF only allows one vat rate to be set for a whole vat period?

Similar to above except for a business switching from FRS to standard VAT on the 1st April.

How will we do this on QF when on annual accounting where only one vat return is submitted and QF only allows one vat rate to be set for a whole vat period?

Hi @George_H

As you rightfully say, QuickFile only supports one rate per period at the moment, so when it comes to submitting the return, it will need to be manually adjusted to account for the rate change.

Changing the rate on QuickFile half way through a VAT period would change it for the whole period.

One thing that may be of interest, there was a post on the forums from another user who mentioned that HMRC may authorise use of the flat rate scheme for a longer period. I don’t have any details other than the ones in their post (linked below), but it may be worth checking that out with HMRC which could help save a bit of a headache

Thanks, that post is fine for those deregistering from VAT, however many will not be doing that, hence my questions on the 2 other options when remaining vat registered either in the FRS or switching to standard registration.

I have been working out how to do it each way with QF the way it is.
QF’s also adds the “vat profit” made using the FRS at year end as a taxable “Flat Rate VAT Sales Adjustment” so just running the vat return at a single vat rate and making an adjustment on that return will not account for the “Flat Rate VAT Sales Adjustment”

Will the following work for annual vat for this years dual FRS vat rates?:

On 31st March for the current vat rate %, submit a vat return on quickfile (with HMRC submission switched off), for the year upto 31st March. Then change the flat rate vat % to the new 16.5% from the 1st April.
Then at year end do another vat return for the remaining part of the year. Then add the two vat returns together and using the HMRC’s online vat submit the total years figs.
QF will then show all EOY vat correctly as well as show the correct “Flat Rate VAT Sales Adjustment” in the Turnover.

Then further vat returns can be submitted to the HMRC by QF in the usual way.

The above principle should also apply for someone who is switching from FRS to standard vat mid year, except they will also need to include vat on all purchase invoices from 1st April

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I can’t see an issue with the way you describe. Even if they were submitted through QuickFile to HMRC, it’s likely that HMRC would reject them.

Providing all the figures are correct too, then everything should match up as normal.

Thanks for the confirmation that the dual FRS rate method will work on QF.
I agree that HMRC would reject 2 x QF submissions for annual vat accounting, thats why I covered using HMRC’s online vat return submission for the transition year instead of trying to submit 2 periods using QF filing to HMRC.

I will apply this method for my clients staying on the FRS and switching to standard vat.
And I will apply the “llywelyn_owen” method mentioned by support for those leaving FRS