Hi
Before I go ahead I just wanted to check that I am understanding this correctly. I want to register for VAT voluntarily as I am under any thresholds for compulsory registration.
I should gain financially but which example is correct:
I earn £30,000 net pa (pre expenses) and so will charge VAT @ 20% therefore bringing in an extra £6000 pa.
On the Flat Rate Scheme I have to pay the Vatman 11%, so is that 11% of the net £30,000 (£3,300) or 11% of the gross £36,000 (£3,960)?
My expenses are £3,600 pa (let's say that's all Vated) therefore having a Vat content of £600 which I can't claim as I'm on the Flat Rate Sceme.
So is it:
Gross income £36,000
- VAT paid £ 3,300
- Vat unable to reclaim £ 600
= Total income £31,800
OR
Gross income £36,000
- VAT paid £ 3,960
- Vat unable to reclaim £ 600
= Total income £31,440
Obviously I'm ignoring the Tax elements just to make the calculation simpler.
Or am I totally wrong here?
Thanks
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