Question asked by John Timbrell 10 years ago
Flat rate scheme for VAT has been set up. When entering bills & expenses what VAT Rate should be chosen? I don't really want to have to enter the correct rate on each bill / expense as entering the purchases gross should be sufficient. Do I s3elect manual or exclude from VAT Return? Thanks for your help.
Hi John
If you can handle it, i'd go for entering the actual VAT on bills, that way you'll be able to use the brilliant VAT comparison feature (Reports > Tax > VAT Comparison) which helps monitor whether the Flat Rate Scheme is still beneficial or not.
If you're honestly not interested in that feature it makes no difference whatsoever whether you put them through as 0% or excluded as the return will only pick up sales anyway (unless claiming any capital assets over £2k for which you'd need to use the correct %)
Best answerEssentially, as at the date of your last VAT return the VAT control should be at zero. If there's a credit balance on there still because FRS wasn't setup properly, it needs moving over to the P&L. To do so will require a journal.
If there are only a few entries that have thrown the balance out you could DR the VAT control with each amount and CR the relevant P&L a/c the original transaction relates to.
If however it's more complicated than that you can just do a bulk entry where by you DR the VAT control and CR sales or other income.
The net effect will be the same either way, it could just make the P&L look slightly different in each scenario.
It's a possibility, but it's a year ago now.
If I did do that, how do I rectify it?
Did you perhaps start entering transactions normally and then switch the VAT scheme to FRS in your settings?
It seems not to have recognised that in the VAT control account but it is clearly indicated in the settings that we are on it.
Do you mean essentially Clear Books doesn't know you're on the Flat Rate Scheme?
Just to follow up on this - I have entered the actual VAT on my invoices but we are using the Flat Rate Scheme so this means that I have a credit balance in my VAT control account. How to I deal with this?
You must 