When I enter a sales invoice I enter the net figure and the VAT figure to give the gross figure. I then enter the gross figure as paid. However, when I trigger the VAT return it gives the VAT figure as 20% of the gross…what am I doing wrong? Box 6 says flat rate turnover inc VAT but then VAT due on sales box 1 gives box six figure PLUS 20%…confused!
ACTUAL FIGURES…SALES £410.13
BOX 6 £492
BOX 1 £98.43
BOX 3 £98.43
Surely boxes 1 and 3 should be £82.03?
If the system is giving you 20% of the gross price as the VAT, it sounds like you may have the flat rate scheme enabled on your account and set to 20%. One of these are incorrect.
You can check this by going to Account Settings >> Company Settings >> VAT Settings
If you are on the flat rate scheme, you’re likely to be benefiting from a lower VAT rate, which you can change here.
Or, if you’re not on the flat rate scheme, you can disable it and the system will calculate VAT on the net price.
Thank you so much…disabled it and works a treat! We didn’t really understand the flat rate scheme box when we were doing the account settings but definitely are not on it!