Question asked by Evan Jolly 6 years ago
Hi
I am currently on the FRS for VAT, but have some income that is 0% rated. On my VAT return these are still included in the figure on which the FR is calculated. Is this correct? And if so, why?
Thanks a lot
Evan
Hi Evan - yes unfortunately so, at 16.5% it sounds as though you are on the higher rate for limited cost businesses.
We do have a VAT comparison report if you want to ever consider switching -
https://support.clearbooks.co.uk/support/solutions/articles/33000203164-vat-comparison-tool
Best answerHi Evan, it is indeed correct - "You calculate the tax you pay by multiplying your VAT flat rate by your ‘VAT inclusive turnover’."
Hi John, thanks for the reply. So even though it is 0% rated it is still included in VAT inclusive turnover? Doesn't this mean that I am then paying 16.5% to HMRC on an invoice that had no VAT on?
Thanks!
Hi Evan - yes unfortunately so, at 16.5% it sounds as though you are on the higher rate for limited cost businesses.
We do have a VAT comparison report if you want to ever consider switching -
https://support.clearbooks.co.uk/support/solutions/articles/33000203164-vat-comparison-tool
Best answerOk thanks John. This is actually my last quarter on FRS anyway. Thanks again for the help
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