Hi there Im on flat rate VAT 10% but on the calculations the HMRC are getting more money i seen on the help guide you need to change the settings but struggling to find out how to do this.
many thanks James
This should help Flat Rate VAT
How much “more”? Remember that flat rate is a percentage of your sales including VAT, so on an invoice where you’ve charged the customer £100 net + £20 VAT, the amount you owe HMRC on flat rate is 10% of £120 = £12, not 10% of £100.
Hi Ian thanks for your email
I’ve set all the settings correctly l know when l create a invoice for £100 + VAT =£120 is says l should change the rate when filing tax return to code 4999 but don’t know how to do it
Thanks
James
It’s only at the point where you submit a VAT return that QuickFile actually does the flat rate calculation. As you raise invoices those will show the net on the relevant sales code and the VAT that you charged the customer on the sales tax control account exactly as it would if you weren’t on flat rate. When you submit the return, QuickFile calculates what you owe on the flat rate basis, then journals the total customer VAT off the control account, the calculated flat rate amount owed onto the vat liability nominal, and the difference onto 4999 to show as extra turnover on your P&L.
Thank you for the clarification
Ian
This topic was automatically closed 14 days after the last reply. New replies are no longer allowed.