If someone is registered for the flat rate vat scheme do they charge their customers at the standard vat rate of 20% & then work out their flat rate % of say 6% on their sales to pay hmrc on their return? Or do they just charge their customers the 6% on their sales invoices?
Customers are charged VAT as normal (20% if that is the rate for the goods).
That a client is on a flat rate scheme is a no never mond to their clients. It is something peculiar to their business.
kind regards,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Sorry to gatecrash.......but as there is a choice whether or not to register on a flat rate/retail scheme, then there must be reference to both the business records and the HMRC rate to make sure it is the most efficient way (other than just saving time). Are these HMRC rates published.......i.e., for different types of business??
yes, I take your point but that wasn't the question.
The question was when you are on the flat rate scheme what rate does the client put on their invoices, 20% or the flat rate %.
I know, I had to read it a couple of times as well to make sure that I was answering what was being asked.
Considering the question I think that your answer to a related issue (whether one should go down that path in the first place) which is not the one that the poster was having might confuse matters.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Absolutely......I understand that it is a separate issue and that you were indeed answering the question that was first posted. That's why I started with gatecrash comment. I know it is a different thing, but it is related and something I though of whilst reading the OP and you reply.
I am curious to know where this information might come from if not assessed on a case by case basis by a 'human'!
We have just come out of the flat rate scheme, but basically how it works is that you invoice clients plus VAT at 20% and then pay the HMRC a percentage of the invoice total (including VAT).
For a company on a 14% flat rate percentage and invoicing a client for £1000. They would invoice the client for £1200 (£1000+VAT) and then pay the HMRC £168 (14% of £1200).
You also get a 1% discount during the first year of using the flat rate scheme.
The downside is that you can't reclaim the VAT on items purchased unless they are capital items and over £2000 is spent in one transaction, thats not to say each capital item purchased has to be over £2000, you could buy 5 items at £450 each and so long as they are on the same invoice then you can reclaim the VAT spent.
