vat flat rate

[V8Druid]

Originally Posted by AtlasRob

NOTE........WE ARE TALKING FLAT RATE VAT

.

Why do you opt for flat rate Rob - would've thought you'd be better off on conventional/full - all your customers can claim what you'd have to add on and you could claim everything - admittedly you'd have all the accounting, returns, etc., to do, but not beyond

[komatsu]

A lot better off on the Flat rate, another piece of priceless information from Mr Taylor if he wasn't on the levers, he'd make a very good accountant!

[doobin]

Originally Posted by V8Druid

Why do you opt for flat rate Rob - would've thought you'd be better off on conventional/full - all your customers can claim what you'd have to add on and you could claim everything - admittedly you'd have all the accounting, returns, etc., to do, but not beyond

I completely agree. What are people's reasoning for going flat rate? I looked at it but it seemed just like offering up the KY jelly to HMRC.

[komatsu]

Originally Posted by doobin

I completely agree. What are people's reasoning for going flat rate? I looked at it but it seemed just like offering up the KY jelly to HMRC.

Speak to your accountant, it's not for everyone, but for us, it's the best option available

[AtlasRob]

Originally Posted by V8Druid

Why do you opt for flat rate Rob -

Originally Posted by doobin

I completely agree. What are people's reasoning for going flat rate?

Originally Posted by komatsu

Speak to your accountant, it's not for everyone, but for us, it's the best option available

In ( I will say MY as its wrong to infer it works for others, they must check for themselves) my situation as I do not provide fuel there works out to be little VAT I can actually reclaim.

Take my tongue in cheek comment about filters in earlier post. How much do they actually cost me in a month / quarter, + oil, fuel in van?..... trying to think of anything else I purchase in the course of a month ??????????

If you do your own contracting work, supplying a few fence posts, panels, wire, concrete etc or driveways where you supply kerbs, blocks or slabs along with concrete, sand, shingle pipes, then I agree its probably not worth being on Flat Rate but especially for those smaller guys I would still be inclined to read the info and do a paper exercise to compare how you would have faired over the past few months / years to see if you would benefit.

The reduction in paperwork is a god send and you can never have the fear of a mistake and subsequently be accused of fiddling.

The Flat Rate is designed for the small business to reduce the paperwork to allow you to concentrate on your business not the burden of paperwork.

First thing you need to do is work out what rate you would be on from this list. This is the rate that you apply to your GROSS figure INC VAT,

http://www.hmrc.gov.uk/manuals/frsmanual/FRS7300.htm

Assuming you invoice £1000 + vat to a customer of which you paid £500 + vat for materials. Thats £200 - £100 = £100 you owe hmrc on that job.
If you were on 9.5% Flat Rate you would be worse off. £1200 x 9.5% = £114 to hmrc.

Do the calculation on an Invoice £3400 + vat = £4080 with material costs of £1500 + VAT. £680 - £300 = £380 to hmrc.
On Flat Rate of 9.5% ( you need to check for yourself what rate you would be on ) £4080 x 9.5% = £387.60 to hmrc.

Only you will know what % of a job is materials, the lower the material content eg higher man hours and machine usage then more likely it is you would benefit from the Flat Rate.

Anybody who has been trading for a few months will have paperwork to reference to do precise calculations to see if they would benefit.

Talk to you accountant / book keeper if you think it might help you. Its nice to gain a little financially but its even better to reduce the headache of hours spent weekly doing paperwork.

I AM NOT AN ACCOUNTANT NOR TRAINED IN ANY ASPECT OF TAXATION ALL INFORMATION IS AS I UNDERSTAND IT.

[doobin]

Aha, got it! It works for you because you make a lot of profit?

That'll be where I'm going wrong

[V8Druid]

Originally Posted by AtlasRob

In ( I will say MY as its wrong to infer it works for others, they must check for themselves) my situation as I do not provide fuel there works out to be little VAT I can actually reclaim.

Take my tongue in cheek comment about filters in earlier post. How much do they actually cost me in a month / quarter, + oil, fuel in van?..... trying to think of anything else I purchase in the course of a month ??????????

If you do your own contracting work, supplying a few fence posts, panels, wire, concrete etc or driveways where you supply kerbs, blocks or slabs along with concrete, sand, shingle pipes, then I agree its probably not worth being on Flat Rate but especially for those smaller guys I would still be inclined to read the info and do a paper exercise to compare how you would have faired over the past few months / years to see if you would benefit.

The reduction in paperwork is a god send and you can never have the fear of a mistake and subsequently be accused of fiddling.

The Flat Rate is designed for the small business to reduce the paperwork to allow you to concentrate on your business not the burden of paperwork.

First thing you need to do is work out what rate you would be on from this list. This is the rate that you apply to your GROSS figure INC VAT,

http://www.hmrc.gov.uk/manuals/frsmanual/FRS7300.htm

Assuming you invoice £1000 + vat to a customer of which you paid £500 + vat for materials. Thats £200 - £100 = £100 you owe hmrc on that job.
If you were on 9.5% Flat Rate you would be worse off. £1200 x 9.5% = £114 to hmrc.

Do the calculation on an Invoice £3400 + vat = £4080 with material costs of £1500 + VAT. £680 - £300 = £380 to hmrc.
On Flat Rate of 9.5% ( you need to check for yourself what rate you would be on ) £4080 x 9.5% = £387.60 to hmrc.

Only you will know what % of a job is materials, the lower the material content eg higher man hours and machine usage then more likely it is you would benefit from the Flat Rate.

Anybody who has been trading for a few months will have paperwork to reference to do precise calculations to see if they would benefit.

Talk to you accountant / book keeper if you think it might help you. Its nice to gain a little financially but its even better to reduce the headache of hours spent weekly doing paperwork.

I AM NOT AN ACCOUNTANT NOR TRAINED IN ANY ASPECT OF TAXATION ALL INFORMATION IS AS I UNDERSTAND IT.

Cheers Rob - useful explanation - as you say, in your situation, it suits you ideally - were you supplying fuel, perhaps not quite such a simple equation!

[AtlasRob]

Originally Posted by doobin

Aha, got it! It works for you because you make a lot of profit?

That'll be where I'm going wrong

LMAO, suppose you want a lesson on that next

[AtlasRob]

Originally Posted by V8Druid

....... were you supplying fuel, perhaps not quite such a simple equation!

Very true, fuel would be a big expense and could make a difference indeed.

As stated, everybody will have a different senario and need to check for themselves.

[komatsu]

Originally Posted by AtlasRob

I AM NOT AN ACCOUNTANT NOR TRAINED IN ANY ASPECT OF TAXATION ALL INFORMATION IS AS I UNDERSTAND IT.

Shouldn't this be in the small print