Corporation Tax and VAT

[hardings2]

I have a small limited company and we are registered for flat rate VAT
In past years I have always accounted for VAT paid to HMRC as an expense.
This years Corporation Tax return asks for a breakdown of expenses and there is no catagory into which VAT would fit. I can't find any guidance on the HMRC website.
Can anyone help?

Thanks
Jon

[pjclar02]

Hello there

Assuming you declare your turnover gross, then the flat rate VAT can be deducted from your turnover figure.

[Generix]

On the other hand, if you record everything net, and your VAT balances are sitting on your balance sheet then;

Any input VAT sitting in your balance sheet should be written off to the p/l (that is any input VAT you incur will be added to cost of sales or the appropriate respective place for the cost. Except for input VAT which was recoverable (e.g. on first return or capital items) which is ignored/excluded from your P/L and therefore does not impact your Corp tax return.)

The output VAT sitting in your balance sheet should also be ignored for the purposes of the P/L, however, if you have made any profit from the flat rate scheme, because the output VAT you collected was more than the VAT paid to HMRC due to the flat rate, then this DIFFERENCE must be added to your turnover/sales figure for calculating the corp tax.

I guess if you are using flat rate scheme it makes sense to record things gross. Though I would hate this as I like the VAT to be identifiable at any given time.

[hardings2]

Thanks for the replies.
Although I record my turnover as gross. I took the 14.5% I pay in VAT to HMRC from this figure. Net profit is still the same as that recorded in my accounts.
Regards

Jon