Hi, I’m having a problem with the Flat Rate VAT calculations.
Using cash accounting with a flat rate of 13.5%
I have not input all accounts yet, but just 1 invoice, so calculations should be easy.
Customer invoice
Services £1,511.25
VAT @20% £302.25
Total £1813.50
So by my calculations, and this is possibly where things are awry:-
we should pay HMRC
1,511.25 * 0.135 = 204.02
However, when I run a VAT return its shows that I should pay HMRC £244.82
Which is 13.5% of the total invoice amount ie (Services + VAT) * 13.5% where I was expecting to be paying (Services) * 13.5%
Have I just used the wrong calculation?
Thanks
Brett