Just reached the end of first year of trading and need to change the flat rate percentage that apply to trading from now on (i.e. after the 1st year discount rate). I can see how to do this (Account Settings>Company Settings>Basic Settings>Click Here For More VAT Settings then change the box “Flat Rate To Apply”) but want to make sure that applying the change will only impact invoices moving forward and not retrospectively. Also is a record stored somewhere in the system showing which date the change was made for accounting/tax audit purposes?
It won’t affect any invoices that have already been reconciled to a previous VAT return. However when you change the Flat Rate percentage this is referenced at the point you submit your next VAT return and applied to all items that are picked up in that return.
Thanks for the reply Glenn… regarding “Also is a record stored somewhere in the system showing which date the change was made for accounting/tax audit purposes” - will this be stored somewhere? I’d like to be able to look back later (or if my accountant wants to do this) and see which date the change in flat rate was applied from.
We don’t store the exact date the flat rate percentage was changed, but we do store this on the VAT return. So the next VAT return you file will reflect the new Flat Rate and that rate will be applicable to all items contained in that VAT return.