To calculate your VAT payable to HMRC, apply your flat rate VAT percentage to your ‘Flat Rate Turnover’. If you are still within your first year of VAT registration then remember to reduce your flat rate percentage by one per cent.
Your flat rate turnover is all the supplies your business makes including:
- VAT inclusive sales for standard rate, zero rate and reduced rate supplies.
- Sales of exempt supplies, such as rent or lottery commission - you don't have to make any partial exemption calculations.
- Sales of capital expenditure goods - unless you have previously reclaimed the VAT, in which case they must be accounted for at the standard rate and not the flat rate.
- Sales to other EU countries.
- Sales of second-hand goods - but if you sell a lot of these, you may be better off leaving the Flat Rate Scheme and using a margin scheme.
Please Don't Include:
- Services you've purchased from outside the UK that you've had to reverse charge.
- Disbursements - costs you pass on to your clients that meet the necessary VAT conditions.
- Private income, for example income from shares.
- Bank interest received on a business account.
- The proceeds from the sale of goods you own but which have not been used in your business.
- Any sales of gold that are covered by the VAT Act, Section 55.
- Non-business income and any supplies outside the scope of UK VAT.
- Sales of capital expenditure goods on which you have claimed back the VAT you paid.
Why Choose EAFS?
- We are Payroll Experts: We have major experience in Europe and hold all necessary licences for distributing payroll across the EU.
- Value for Money: Our fees are highly competitive and very reasonable, especially compared to other firms.
- We are on top of the Latest EU Developments: The legislation for the European Union is constantly changing, we stay up to date with all developments to provide the most legally compliant service at a competitive price.