Flat Rate Scheme and reverse charge

[abc-inflatables]

Im going to join the flat rate scheme
I sell on Ebay,
Ebay are supplying me a service from outside the UK.
there charging me 15% VAT

Have i got this correct
I tell ebay im vat registered and they stop charging me the VAT
I then put in box 1 the Vat at 20%
Then i put in box 4 the same amount so it cancels out what i put in box 1
I dont include it with my turnover in box 6

[Generix]

For pretty much any services you buy in from foreign suppliers (where they charge you no VAT) - you should include the net cost in box 6 and 7, and then apply 20% to the net cost and add that figure to the figures already calculated for boxes 1 and 4.

You should not apply the flat rate treatment to the reverse charge.

(Just remembering you are a dropshipper - you don't need to apply the reverse charge to intra or extra community freight costs; technically its reverse charge at 0% - but not worth worry about.)

[Generix]

sorry - that should of read "in case you are a droppshipper"

[abc-inflatables]

Hi Generix

Thats not what it says here
http://www.hmrc.gov.uk/vat/managing/returns-accounts/fat-rate-returns.htm

How to complete Box 1 to Box 5
Box 1: VAT due on sales and other outputs
You need to include any services from abroad that the reverse charge applies to, but don't include the value of the services in your flate rate turnover calculations.

Box 4: VAT reclaimable on your purchases
•You also need to include any services you bought from abroad that the reverse charge applies to, and that you are entitled to claim back the VAT on - this will cancel out the figure you included in your Box 1 total.

[Generix]

Hi Generix

Thats not what it says here
http://www.hmrc.gov.uk/vat/managing/returns-accounts/fat-rate-returns.htm

How to complete Box 1 to Box 5
Box 1: VAT due on sales and other outputs
You need to include any services from abroad that the reverse charge applies to, but don't include the value of the services in your flate rate turnover calculations.

Box 4: VAT reclaimable on your purchases
•You also need to include any services you bought from abroad that the reverse charge applies to, and that you are entitled to claim back the VAT on - this will cancel out the figure you included in your Box 1 total.

Thats exactly what I said.

You have to include the reverse charge on your VAT return, by putting the net cost in box 6 and 7, and the VAT charge in box 1 and 4.

You ignore it when calculating the VAT for your flat rate scheme calculation though.