I've just got a new client who uses the marginal VAT scheme. I had a look at the last years accounts and saw what i assume to be the savings made by using the margin scheme were listed in their profit and loss statement as a line under sales.
I'm now just running the first VAT quarter and noticed that sage instant (2013) has asked me how much scheme benefit/cost there is to be assigned to nominal code 4099. This amount is then shown in the sales figure amount when i run a profit and loss.
Just wondered if I'm correct in thinking this is the savings made and i wondered what this means for corporation tax purposes when it is being shown within the sales figure?
Yes, I think this is exactly what 4099 is for in the standard Sage charts of accounts. I have to say that I don't like it at all.
I've never dealt with it in relation to a company but the HMRC notes on Self Assessment Form 103 (sa103f-notes.pdf) require separate disclosure of "normal" sales and the benefit from using the scheme
If you decide to record your figures:
excluding VAT, include
- in box 15 any balance on your VAT account that is not to be paid over to us (this is the amount of VAT on your income that exceeds the VAT paid on your expenses, plus the payment under the Flat Rate Scheme)
Box 15 is "Any other business income not included in box 14". The same document also advises that expenditure Box 29 should include "...net VAT payments" i.e. any costs of using the Flat Rate Scheme (rarely the case).
Both are fully involved in the calculation of tax due but it seems odd that the overarching category that Sage has chosen for these amounts is not "Other Sales". Maybe they consider that the materiality of the amounts involved do not warrant a more detailed analysis?
