Skip to main content
H
Havana
September 18, 2018
Question

Flat rate scheme VAT

  • September 18, 2018
  • 1 reply
  • 0 views

I can see that even though the system is set up for flat rate vat, standard rate vat inputs and outputs are posted to the VAT control.  At the end of the quarter the flat rate vat is posted to VAT suspense and an adjustment is made to VAT control for the "savings by FRS".  I expected this figure to be the inputs plus the difference between standard and flat rate VAT, so clearing the VAT control to zero but it isn't!  Can anyone enlighten me as how this process works please?

1 reply

JamesC
JamesC
September 18, 2018

Hi Havana,

 

I'm happy to help you learn a bit more about the process of flat rate VAT on QBO. I hope you'll find these community pages as informative as we do, and i hope you learn lots of tips and tricks off other peoples posts.

 

With QuickBooks Online, our VAT Engine works where it posts the full amount of VAT to the VAT Control account; and the transfer of funds into being recorded on the FRS Gains/Losses account happens when you mark the period as Filed.

 

For example, £1000 transaction exclusive of £200 VAT totaling £1200 payable. 20% S Code posts £200 to the VAT Control Account. Say you've got FRS of 12%. When you mark the return as filed on QBO the system will move the difference to the FRS Gains/Losses account. In this case it would move £67.20 to the FRS Gains/Losses and £172.80 to VAT Suspense.

 

VAT Suspense account should be the balance due to HMRC based on your VAT return screen. Whether you're making a gain, or a loss if you've had lots of purchases, it will show on your Profit & Loss Account as an income or an expenditure.

 

The key to understanding what you're looking at on your reports is to understand that the system only makes these movements of funds when the period is marked as filed on QuickBooks Online.

 

If you have any questions, or want me to elaborate anything, just let me know.

 

Thanks,

 

 

H
HavanaAuthor
September 18, 2018

Where do you get £67.20 and £172.80 from?

JamesC
JamesC
September 18, 2018


Hi Havana,

 

I'll try that one again, I'd not clicked Save on my test transaction and gave £1200 Exclusive of VAT so hence the £172.80 - My bad!

 

Here goes.......

 

For example, £1000 transaction exclusive of £200 VAT totaling £1200 payable. 20% S Code posts £200 to the VAT Control Account. Say you've got FRS of 12%. When you mark the return as filed on QBO the system will move the difference to the FRS Gains/Losses account. In this case it would move £56 to the FRS Gains/Losses and £144 to VAT Suspense.

 

Thanks for coming back so quickly ^_^

Terms & ConditionsAccessibility statement