FRS and post offices

[Kitty Kat]

I know the answer, but I'd like to hear it from one of you before I go confess to the partner.

In a burst of vim and vigour when I first started here (and first started in VAT) I suggested a post office client be put on the FRS as it would save them VAT. However as time has passed and I have grown (slightly) wiser and learned our clients more, I suspect this has been done in error. The client is indeed a post office, however this is almost a side line. They are a shop with a post office in it, and it appears this is a much more accurate description than post office.

So the best thing I can do is get them out of the scheme quietly and say no more of it isn't it? Or does 'post office' stretch to my description above?

[Generix]

I know the answer, but I'd like to hear it from one of you before I go confess to the partner.

In a burst of vim and vigour when I first started here (and first started in VAT) I suggested a post office client be put on the FRS as it would save them VAT. However as time has passed and I have grown (slightly) wiser and learned our clients more, I suspect this has been done in error. The client is indeed a post office, however this is almost a side line. They are a shop with a post office in it, and it appears this is a much more accurate description than post office.

So the best thing I can do is get them out of the scheme quietly and say no more of it isn't it? Or does 'post office' stretch to my description above?

Haha...depends how post officey they are really. I suspect they are mainly a retail shop and therefore have a higher % to be applied. Do you have access to the figures for each return to find out what the damage done is? Also in your defence were you aware of their circumstances when you first applied, i.e. did they make it clear they were not just a post office?

This is one of the many reasons I hate the FRS, in my opinion unless you have no/next to no input VAT then its just not worth doing, unless you can predict your expenses/income well enough to know you'll turn a profit from the FRS.

[robbob]

Hello Kitty

To be fair to you the flat rate for post offices used to be considerably lower than it is now (2% when vat was originally at 17.5% compared to 5% now) and it is hard to measure the impact of any changes without having some actual number to crunch for a reasonable period of time after the date of changes in the vat rate. There is also the added benefit for clients on the flat rate that they don't have to worry about providing the info in a suitable format so that the inputs can easily be worked out by yourselves without bumping their fee up too much

I suspect they are mainly a retail shop and therefore have a higher % to be applied.

It may possibly be the case that they fall into the "Retailing food, confectionary, tobacco, newspapers or children's clothing" where the flat rate is 1% lower than that for a post office.

I have a client who is a newspaper/sweets retailer and they left the flat rate last year and they have had a definite small reduction in vat payable.

[Generix]

I suspect they are mainly a retail shop and therefore have a higher % to be applied.

It may possibly be the case that they fall into the "Retailing food, confectionary, tobacco, newspapers or children's clothing" where the flat rate is 1% lower than that for a post office.

I have a client who is a newspaper/sweets retailer and they left the flat rate last year and they have had a definite small reduction in vat payable.

Hmmm. I would have assumed retailers had more SR items with bigger margins than post office had irrecoverable VAT; never bothered looking at the %s in the notice though.

So Kitty you could have a nice Vol Disc to make and get some cash back

[Generix]

also if they mainly sell booze, they might be considered an off-license which probably has a higher % (again should do on my logic - cba checking public notice though )