Hi,
Firstly, thanking for helping with my previous query. I didn’t have time to say thanks before the topic had been closed. Thx for prompt service. However, I have an VAT accounting query.
I am using annual flat rate for IT (14.5%) on my sales. I thought you couldn’t claim VAT on Purchaes using flat rate, but the VAT report has deducted the VAT at 20% from my purchases. Is this correct for flat rate? That’s good for me as they will owe me (a little).
Normally you can’t reclaim VAT on the purchases you make while you are on the flat rate scheme. HMRC do however allow you to reclaim VAT on certain capital asset purchases in excess of GBP 2,000. A full list of criteria for making such a reclaim can be found on the link below:
From what you have said I think you may have been ticking this box on all your purchase invoices. as by default on flat rate vat you can not enter a vat rate or amount
If the return has been submitted you will not be able to check this as the invoices will be locked.
Thank you for the explanation. I guess I will need to inform HMRC of the error, and adjust accordingly. I will journal out the input VAT transactions in my accounts
Thanks
I’m happy for the post to be closed