Hi, I’m having to manually calculate VAT as it is incorrectly being reported by the system. Previously when I down loaded the spreadsheet to check the figures they would be fine, but the last two returns several data fields are blank (e.g invoice number) and it calculates vat at 20%. We are on the 16.5% flat rate scheme. The Vat system in quickfile used to be great, i don’t think we’ve changed anything our end - any ideas? Screenshot attached. Many thanks Martin
If there’s no invoice number its probably a payment that hasn’t been linked to an invoice. Where are you seeing vat calculated at 20%? Your turnover in the screenshot is showing as £2295 so not sure where the £1912 comes from
The £2295 is the Turnover of £1912.50 * 20% which is the vat rate. By my calculations the vat should be £315.56 (i.e. £1912.50 * 16.5%) not the £378.68 which is what Quickfile calculated.
So is £1912 your net or gross turnover? Your adjustment says gross but if its adding vat to it then it would be net. Net is without any vat. Flat rate is your gross turnover times your flat rate.
£1912.50 is the turnover with no Vat, at 20% the vat charged is £382.50, but if I pay Vat at 16.5% to HMRC this should be £315.56, rather than the figures quickfile generate. I don’t understand why the Vat reporting is reporting it incorrectly now - it has done for the last two returns but was fine before then. What am i missing!
Flat rate is calculated on the gross turnover. You would charge your clients 20% as normal. Take your gross income and multiply it by your flat rate. It would be 16.5% of your gross. Rough calculation, but £1912.50 x 1.2 to add 20% would be £2295. You pay hmrc 16.5% of this, £378.67. If there are payments included too then it could be why the figure in the vat return is calculated slightly higher than what I have.
Thank you. I will go through this with my accountant to make sure I’m not doing something wrong here, but the downloaded calculations are different to how that have been previously - various fields unpopulated. Still unclear why, but will continue to monitor - thank you for your help.
If you’re on 16.5% flat rate then unless you have basically zero purchases on which you pay VAT to your suppliers then you’re probably better off leaving flat rate and just accounting for VAT normally.
As pointed out above flat rate percentage is calculated off your gross turnover - if you charge someone £1000+VAT = £1200 gross then the flat rate vat you pay HMRC is 16.5% of £1200 = £198. If you have paid more than £2 VAT out to suppliers on purchases that relate to that sale then you would be in pocket by switching to standard VAT and claiming back the purchases.
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