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Gary Cruse
June 10, 2021
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First VAT Return under Flat Rate Scheme

  • June 10, 2021
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Preparing my first VAT Return... confused! I am using the Flat Rate Scheme at 8.5%

How is "Box 1 VAT due on sales and other outputs" calculated?

My total VAT charged on sales does not match the amount in this box.

The amount in Box 1 is £3158.84. When I click on the amount it shows that the total VAT charged on Sales is £2097.24. This makes no sense to me. I expected it to match.

NET Value of Sales does not match either when I click on it. £10300.05 in Box 6 compared to £10486.15 when I click on the amount.

 

My next question relates to a van bought before I started trading (within the time limit for reclaiming VAT).

 

So I recorded the expense on 29/2/2020. I became VAT Registered on 1/5/2021. When I recorded expenses prior to VAT registration, I recorded them all as No VAT. I believe this is correct. If I am reclaiming the VAT do I need to go back and record this with the VAT amount showing and tick the VAT reclaimable box, or do I leave it as it is. I have already made an adjustment to Box 4 for the amount I am reclaiming.

 

Third question relates to Sales and Purchases. When buying materials for jobs, I have categorised the expense as Cost of Sales. On the invoice I have also categorised materials used as Cost of Sales. I am now wondering whether materials bought should be Purchases and on invoices materials used should be Cost of Sales. However, when I started changing some of the Expenses of materials to Purchases this had zero impact on Box 7 (Net Value of Purchases).

 

Blinking headache and late nights!

 

Any support would be much appreciated. Thank you!

 

Best answer by MariaSoledadG

Let me share with you some information about VAT return under Flat Rate Scheme (FRS), Gary Cruse.

 

When you use the FRS, you'll have to pay a fixed percentage of your VAT to HM Revenue and Customs (HMRC) depending on the type of business. For Box 1, when you're using the standard rate VAT, the code used on the sales form is VAT at 20%. then Net Sale to Box 6. For reduced rate. it is at 5%.

 

Whereas on the purchase form, it is calculated at 20% to Box 4, Net Purchase to Box 7 for standard, and still at 5% for the reduced rate. On the other hand, when reclaiming, some goods and services that are outside the scope of VAT should not be reported on the VAT return. Please read this article for the complete information on what are thee goods: Common VAT codes.

 

There's also an overview explained in detail about Flate Rate Scheme in this article: QuickBooks Online Flat Rate Scheme explained. But I would still recommend reaching out to your accountant if you have any other concerns about the calculation. 

 

For your reference, you can run this report to help you file your return in QuickBooks Online: VAT 100 Report.

 

Let us know if you have any questions about your taxes. We'll always be right here to further assist you. 

1 reply

MariaSoledadG
MariaSoledadGAnswer
June 11, 2021

Let me share with you some information about VAT return under Flat Rate Scheme (FRS), Gary Cruse.

 

When you use the FRS, you'll have to pay a fixed percentage of your VAT to HM Revenue and Customs (HMRC) depending on the type of business. For Box 1, when you're using the standard rate VAT, the code used on the sales form is VAT at 20%. then Net Sale to Box 6. For reduced rate. it is at 5%.

 

Whereas on the purchase form, it is calculated at 20% to Box 4, Net Purchase to Box 7 for standard, and still at 5% for the reduced rate. On the other hand, when reclaiming, some goods and services that are outside the scope of VAT should not be reported on the VAT return. Please read this article for the complete information on what are thee goods: Common VAT codes.

 

There's also an overview explained in detail about Flate Rate Scheme in this article: QuickBooks Online Flat Rate Scheme explained. But I would still recommend reaching out to your accountant if you have any other concerns about the calculation. 

 

For your reference, you can run this report to help you file your return in QuickBooks Online: VAT 100 Report.

 

Let us know if you have any questions about your taxes. We'll always be right here to further assist you. 

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