Self billing invoice query

Sole trader Flat rate VAT registered

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.

Does anyone know how to get round this?

Basically when you add your new line as a minus figure. Make sure your setting the vat to no vat.

Hi Paul thanks for your reply, I have tried what you suggested and it still seems to be wrong.

VAT payment should be £12 but is showing as £9.60…

Hi @davepikecs

On the Flat Rate scheme, your flat rate (10% in your case) is calculated based on the gross amount.

So your invoice is £96.00 gross (including VAT), 10% of £96.00 is £9.60.

Hope this helps.

Hi Mathew,

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.

Thank you all for your replies I think I’m getting there.

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