Purchase VAT on flat rate scheme

Hi, I have recently registered for the Flat rate VAT scheme and my first return is done in a few days.

I’m not totally sure what is the correct way to account for VAT on my purchases. Do I still account for the VAT on the things I have bought and put in 20%. Do I put it at 0% or do I uncheck the "allow VAT to be declared on this purchase and Ignore the VAT on purchases altogether?

If the latter it means that section 7 of my return “Total value of purchases exc VAT” is empty. Should this not be declared as I have actually paid VAT on purchases so as HMRC do not class my business as a limited cost business?

Hello @Jaxo

I have included a link to our flat rate guide below


If you’re on flat rate you only itemise VAT on purchases where you’re eligible to reclaim it, typically “capital expenditure” over £2,000. Anything else you should leave “allow VAT to be declared on this purchase” as the default unchecked state.

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