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05 Oct, 2021 admin
How to prepare VAT under the Flat rate scheme?
Value added tax (VAT) is a tax levied on the price of product at each stage of production, distribution or sale to the end user. VAT Flat Rate scheme is the fixed rate of VAT to be paid. Business with turnover of up to £150,000 or less (excluding VAT) can apply for this scheme. To join the scheme you can either register online or fill up VAT600 FRS.
For example, your turnover inclusive of VAT for the VAT return period is £100,000 and you’re in advertising business. Moreover, the flat rate percentage is 11% i.e. £11000 VAT will be payable.
Sample to complete VAT Return under the Flat Rate Scheme
| Box 1 | VAT due in this period on Sales | £11,000.00 |
| Box 2 | VAT due in this period on EC acquisitions | £0.00 |
| Box 3 | Total VAT due (the sum of Boxes 1 and 2) | £11,000.00 |
| Box 4 | VAT reclaimed in this period on purchases | £0.00 |
| Box 5 | Net VAT to be paid to Customs or reclaimed by you (Difference between Boxes 3 and 4) | £11,000.00 |
| Box 6 | Total value of sales, excluding VAT | £100,000 |
| Box 7 | Total Value of purchases, excluding VAT | £0.00 |
| Box 8 | Total value of EC sales, excluding VAT | £0.00 |
| Box 9 | Total value of EC purchases, excluding VAT | £0.00 |
Let’s have a look on how to fill each box taking the above example
Box 1 – In Box 1 you have to insert the VAT amount £11000
Note: Make sure to know the flat rate percentage applicable for your business type. (know about rate) follow the link to know the flat rate that you need to pay.
Box 4 – Flat rate scheme includes the allowance for input VAT. So, making claim separately is not done. However, VAT on single purchase of capital goods amounting to £2000 or more is eligible to claim.
Box 4 is also used to claim bad debt relief and to account for reverse charge transactions.
Box 6 – Box 6 is filled with total sales including VAT
Additional transactions in Box 6:
- Gross Sales figure less the VAT amount not accounted under the flat rate scheme. For example, you bought a business asset that you have reclaimed input VAT on.
- EC sales to be include
- Reverse charge transactions to be include.
Box 7 –If only you have bought business assets amounting more than £2000 including VAT and have claimed the input VAT in box 4, this is when box 7 is used. Otherwise, there will be no figure. VAT flat rate scheme.
Other transaction to be included in Box 7:
- EC purchases to be include.
- Reverse charge transactions to be include. VAT flat rate scheme.
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