Got a credit card? use our Credit Card & Finance Calculators
Thanks to gpadsa,Steffers0,lansdown,Wasron,jfgw, for Donating to support the site
VAT Changes
VAT Changes
Are all the PSCs going to de-register for the Flat Rate scheme now that the rate is increasing to 16.5%? The flat rate is paid on the gross so £1000+VAT is £1,200 * 16.5% giving £198 for the taxman and £2 for you. As you can't reclaim any VAT under the Flat Rate scheme unless it is an exceptional expenditure of £2,000 or more, just being able to claim back the VAT on my accountants fee would save me money
-
- Posts: 25
- Joined: November 24th, 2016, 8:54 pm
- Has thanked: 61 times
- Been thanked: 3 times
Re: VAT Changes
That was no doubt the intention of the change...
Either stay on FRS and lose money or move back to standard rate and pay exactly what's due.
No more marginal gains each quarter
Either stay on FRS and lose money or move back to standard rate and pay exactly what's due.
No more marginal gains each quarter
-
- Posts: 2
- Joined: November 8th, 2016, 10:24 am
-
- Lemon Quarter
- Posts: 2939
- Joined: November 4th, 2016, 11:18 am
- Has thanked: 1365 times
- Been thanked: 793 times
Re: VAT Changes
rustycables wrote:What about not registering for VAT.
If you don't charge it do you still pay it?
Yes, you still pay it. If you go to Currys and buy a new PC they charge VAT, you can't tell them not to, it's they who have to charge it so you have to pay it. If you're not registered then you can't claim it back. I think I might deregister, I don't buy enough to make it worthwhile really.
Mel
-
- Lemon Quarter
- Posts: 2941
- Joined: November 4th, 2016, 3:46 pm
- Has thanked: 640 times
- Been thanked: 496 times
Re: VAT Changes
rustycables wrote:What about not registering for VAT.
If you don't charge it do you still pay it?
Well not to HMRC, but you can't recover what you have paid out on expenses, so you have to do the sums.
Plus some business customers are not to happy about dealing with a contractor who is not VAT registered.
Slarti
-
- Lemon Quarter
- Posts: 2939
- Joined: November 4th, 2016, 11:18 am
- Has thanked: 1365 times
- Been thanked: 793 times
Re: VAT Changes
Slarti wrote:rustycables wrote:What about not registering for VAT.
If you don't charge it do you still pay it?
Well not to HMRC, but you can't recover what you have paid out on expenses, so you have to do the sums.
Plus some business customers are not to happy about dealing with a contractor who is not VAT registered.
Slarti
I am considering unregistering and putting my rates up.....
Your second point is one of the reasons I registered so I will need to look into that. What a pain it is.
Mel
-
- Lemon Quarter
- Posts: 2217
- Joined: November 4th, 2016, 4:00 pm
- Has thanked: 424 times
- Been thanked: 803 times
Re: VAT Changes
According to my accountant, the flat rate change only affects businesses whose expenses are 2% or less than revenue. Rather than miss out on the profit potential in the FRS, couldn't you increase your expenses?
-
- Posts: 25
- Joined: November 24th, 2016, 8:54 pm
- Has thanked: 61 times
- Been thanked: 3 times
Re: VAT Changes
HMRC are wise to that one
They are also redefining qualifying expenditure for FRS.
You might find this link useful.
http://www.intouchaccounting.com/resour ... mber-2016/
They are also redefining qualifying expenditure for FRS.
You might find this link useful.
http://www.intouchaccounting.com/resour ... mber-2016/
-
- Lemon Quarter
- Posts: 2939
- Joined: November 4th, 2016, 11:18 am
- Has thanked: 1365 times
- Been thanked: 793 times
Re: VAT Changes
deadeyedjacks wrote:HMRC are wise to that one
They are also redefining qualifying expenditure for FRS.
You might find this link useful.
http://www.intouchaccounting.com/resour ... mber-2016/
"We currently understand that qualifying expenditure excludes the purchase of capital assets, food and drink consumed by the business or employees (subsistence) and motoring costs. "
Well, that's everything! And I'm under the limit anyway, so over £3k pa worse off. Two options, go back to 'not flat rate', or deregister.
Mel
-
- Lemon Quarter
- Posts: 2941
- Joined: November 4th, 2016, 3:46 pm
- Has thanked: 640 times
- Been thanked: 496 times
Re: VAT Changes
StepOne wrote:Another option would be to increase the rate you charge?
Not so easy in the current financial climate.
Slarti
-
- Posts: 2
- Joined: February 15th, 2018, 8:36 am
Re: VAT Changes
With the flat-rate: you pay a fixed VAT to HMRC. you keep the difference between what you charge to your customers and pay to HMRC. you can not reclaim the VAT on your purchases - with the exception of certain capital goods of more than £ 2,000.
Source:-DNS Accountants
Source:-DNS Accountants
Return to “Running a Business”
Who is online
Users browsing this forum: No registered users and 9 guests