Do corporation tax calculations work on a VAT exclusive basis ? I do my sole trader self assessment on that basis, ticking the appropriate box on the form.
The reason I ask is that the flat rate VAT scheme can generate a "profit" in that the amount paid to HMCE could be less than the amount collected from customers who are still charged 17.5% VAT on invoices.
If one did "VAT free" accounting this would be invisible, if not it will be taxable.
Views ?
Phil
There's a couple of ways of dealing this and it makes no difference whether you're a sole trader or a company liable to corporation tax. The IR 'expect' that turnover will shown inclusive of VAT charged less the flat rate vat payable, and expenses will be shown including the VAT.
HTH
Andy
thanks, that's what I needed.
Phil
In message of Sun, 1 Feb 2004, Andy Lord writes
Not necessarily so. The above link to the IR also states 'You may however find that the flat rate VAT payment is shown as a profit and loss expense rather than deducted from total turnover.'
DF
Indeed.
I suppose I could have cut and pasted the whole page but I thought it better to provide the link and let the OP read it for himself. I'm sure it was clear to the OP from my first sentence that there is more than one way of dealing with this. I was merely outlining briefly the method that the IR say that they 'expect' to be used.
Andy
I thought you might also be interested in this:
It also gives details of revised (LOWERED) Flat Rate percentages!
Andy
I.m on my way, thanks...............
Phil
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