Flat rate VAT and income tax


Flat rate VAT and income tax

Postby 118diesel on Tue Apr 06, 2010 11:45 am

I am a soul trader, and am thinking of voluntarily registering for VAT and going on the flat rate scheme. My question is, does the cash made from the FLat RAte scheme beco
e eligible for income tax/national insurance ?
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Re: Flat rate VAT and income tax

Postby pawncob on Tue Apr 06, 2010 9:27 pm

What cash?
Under the flat rate scheme, VAT paid to HMRC is a deduction against profits, since you don't (normally) reclaim any input tax.
With a pinch of salt take what I say, but don't exceed your RDA
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Re: Flat rate VAT and income tax

Postby RAL on Tue Apr 06, 2010 11:08 pm

118diesel wrote:I am a soul trader, and am thinking of voluntarily registering for VAT and going on the flat rate scheme. My question is, does the cash made from the FLat RAte scheme beco
e eligible for income tax/national insurance ?


Yes, it will be subject to tax/ni.

Gross receipt/sales less flat rate vat paid to hmrc = Turn over less expenses = profit.
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Re: Flat rate VAT and income tax

Postby RAL on Wed Apr 07, 2010 9:40 am

pawncob wrote:What cash?


118diesel wrote:I am a soul trader, and am thinking of voluntarily registering for VAT and going on the flat rate scheme. My question is, does the cash made from the FLat RAte scheme beco
e eligible for income tax/national insurance ?


Difference between vat charged to the customer and flat rate vat paid to HMRC.
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