Hi there -one of my clients has registered for VAT and has opted to use the Flat Rate Scheme, but I can't see where in enter that in Sage, or where to put the rate (11% in her case, discounted to 10% for the first year).
I don't think that Flat Rate is supported in Sage Instant or in older versions of Sage Accounts.
For the customer I have on Flat Rate, I record all purchases as T9 and sales at the appropriate rate and do a manual calculation for each VAT return based on the total sales. You can still use the Sage VAT functionality to make sure that you identify all the correct sales for the period and to flag them as reconciled.
Thanks Brewsie. I had kind of figured that all purchase invoices and bank payments would still go through as T9, and sales invoices as T1. It's nice to know I am on the right track!
The HMRC website said that we need to make 9 monthly payments, and only send one return in with balancing payment at year end. In which 9 months would they like us to make payments??
Just thinking out loud, I guess at year end you post some kind of journal to clear the balance off the VAT liability?, ie What Sage thinks you owe HMRC, less what your manual calculation has come to?
The HMRC website said that we need to make 9 monthly payments, and only send one return in with balancing payment at year end. In which 9 months would they like us to make payments??
It sounds like your client has also opted for the annual accounting VAT scheme. The HM Revenue & Customs guidance states that the nine payments are due by the end of months 4 to 12 of your annual accounting year. Details of what HM Revenue & Customs mean by the annual accounting year can be found here.
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Pearce & Co - Chartered Accountant and Chartered Tax Adviser
Brewise and Robert - thanks for your replies. I have just had an interesting conversation with my accountant about the flat rate scheme and he tells me that it's the vat inclusive figure that I apply the flat rate figure to.
IE Sales of £10000 + VAT at 20% £2000 = £12000
I apply the flat rate of 11% to the £12000 ? So my client has to pay HMRC £1320? It's as clear as mud on the HMRC website.
