VAT Flat Rate Scheme

[aadt66]

I operate the Flat Rate VAT Scheme. Does the difference between the VAT chargeable on my invoices minus the VAT recoverable on my purchases and the applicable Flat Rate for my business count as profit for corporation tax purposes?

[paultaylor@vatease.c]

Short Answer: Yes.

Long Answer:

When calculating your income for accounts or tax purposes you should show your gross income (including VAT) minus the Flat Rate Charge paid.

Your purchases should be shown gross, except any capital purchases on which you have reclaimed VAT.

By doing this, the difference between the Net VAT you would have paid and the flat rate you have paid will automatically be included in your taxable income.

Regards

Paul Taylor
0121 778 4299
http://www.vatease.co.uk/