I receive self billed invoices which include a charge, when I create an invoice in quick file to reflect this I’m able to get the invoice right with a minus figure for the charges and the invoice is correct and shows the correct amount of VAT
But when it comes to doing the VAT return the VAT is not correct which means I would be under paying VAT. It looks like the minus figure I’m applying to the invoice is lowering the amount of VAT that should be paid.
On my self billed invoice I receive the charges are shown as
£ 20.00 charges
£ 4.00 VAT
£ 24.00 TOTAL
If I was to receive the invoice without charges the total would be £120 with £12 VAT to pay
And if the charges were billed separate at £20 plus VAT that would be £24 which I would pay and could not claim the VAT from that as I’m on the flat rate.
Something doesn’t seem right as the two ways show me ending up with different amounts after everything is paid.
Flat rate vat is charged as a percentage of the total. Regardless of what happens to arrive at that total.
So if the total is 120 regardless of how its made up the flat rate vat would work out 12 as being the vat.
If. Your certain that you should be paying a percentage of vat on the total billed excluding the charges then create an invoice for the full amount and create an expense for the charges.
