If you realise youve entered the wrong figures on your VAT return, try not to stress. Tide Cards may be issued by both Tide and PPS, who are licensed by Mastercard International for the issuance of cards. The most obvious choice being an accountant. How to fill in each box on your return 4. How the flat rate MTD VAT return works Run your flat rate MTD VAT return Hello, the article you linked in Xero Central about VAT return fields still refers to EC Acquisition tax rate and EC Purchase tax rate, it would be really helpful if this article could now be updated post Brexit. 2023 Xero Limited. Monitor your VAT account in an accounting system. Hello,As you may have seen Xero have created a function to apply a PVA VAT adjustment:https://central.xero.com/s/article/Adjust-the-amounts-on-a-VAT-return#ApplyaPVAadjustmentPVA is quite a complex topic. Further, there are several goods and services that are either VAT exempt (or qualify for partial exemption), out of the scope of VAT entirely, or charged at a reduced-rate or zero-rate. All Rights Reserved. If you cant or dont want to use PVA, therell be no change to the way you deal with VAT on imports for your business. As a side issue how does other software handle outside the scope of UK VAT income for box 6? Details about our audit registration can be viewed at www.auditregister.org.uk, under reference number C005636012. This is usually received around three weeks after the end of the month you received the goods in the UK. VAT is constantly evolving. Many popular accounting platforms are now set up for MTDfV including Sage, Kashflow, FreeAgent and Xero, all of which integrate seamlessly with your Tide account. th QuickBooks Online, QuickBooks Self-Employed, QuickBooks ProAdvisor Program, QuickBooks Online Accountant, https://central.xero.com/s/article/Adjust-the-amounts-on-a-VAT-return#ApplyaPVAadjustment. We have developed a PVA update in Xero. 30% of an assessment if HMRC sends you one thats too low and you do not tell them its wrong within 30 days. Shout out to StartUpAcc for the reminder. Apologies if any of above is wrong peeps. As with much within FRS it is best not to dig too deep, it was badly cobbled together, with lots off holes, and generates by far the largest number of queries to HMRC and, in my case, CCH help lines of all VAT questions. Just had a client investigated. It's a too often used principle but, in this case, "life's too short" works for me. When making an adjustment, HMRC also asks that you: If your error does not meet the adjustment conditions, you need to report it to HMRC by completing form VAT652 and sending it to the VAT Error Correction Team. Find out why 3.5 million subscribers locally and across the world trust Xero with their numbers. I can see how having this additional option and functionality would be helpful for you and your business. We just need to be able to enter the correct PVA VAT for each transaction/quarter without a messy workaround. How to avoid and rectify common VAT mistakes, 9 common VAT return mistakes made by small businesses, VAT exempt (or qualify for partial exemption), reimbursable expenses and how you can claim them, what information you must include on your VAT invoice, the VAT threshold and when should you register for VAT, choosing an accountant for your small business, integrate seamlessly with your Tide account, what Making Tax Digital means for your small business, A quick guide to VAT when youre self-employed, Voluntarily register for Standard Rate VAT, Register for Standard Rate VAT or Flat Rate VAT, Register for Standard Rate VAT, Flat Rate VAT, Cash accounting scheme or Annual accounting scheme. Yes, theres a slightly different way to handle PVA amounts on VAT returns in Xero if youre on a flat rate scheme please contact our friendly support team who will be able to give you a hand by providing you with specific details. Visit our dedicated site for more resources, webinars and updates to help you navigate the COVID-19 pandemic. We should all now know that Outside of Scope applies are not included in FRS turnover. If there are significant DRC sales then this can be very costly. This was very well advertised in the months leading up to introduction of the DRC. Box 6 is the problem for me. Perhaps other software has a VAT flag for supply of overseas services. Thats why were trusted by 450,000+ sole traders, freelancers and limited companies throughout the UK. You are responsible for telling the government exactly how much VAT you charged to customers (known as output tax) as well as how much VAT you were charged by suppliers (known as input tax). Small businesses name Xero the most-loved accounting software for the second year in a row. If not, delegate the role to someone with sufficient knowledge and expertise to keep you VAT compliant. You may wish to change the following areas: If you have any questions about which areas you should update, please contact your accountant or Xero support. VAT, or value-added tax, is relatively straightforward in theory. Don't create work for yourself needlessly. We use cookies to make your experience better. You should also include the value, excluding VAT, of any supplies accounted for outside the Flat Rate Scheme, such as the sale of capital expenditure goods.". This will help HMRC calculate your Monthly Postponed Import VAT Statement (MPIVS), which will be available in your HMRC portal. Some of Tides members also hold e-money accounts provided by Prepay Solutions (PPS) (account sort code is 23-69-72). you are using is correct, enter your Gateway User ID and password, and click the File & Publish button on the File VAT Return screen. Blog / Small business tips / How to avoid and rectify common VAT mistakes. Reporting - it just keeps getting better! Registered as a limited company in England and Wales, number 7208672. registered office is 15 Victoria Place, Carlisle, CA1 1EW where a list of members is kept. PVA gives you the option to account for and recover VAT on your imported goods using the same VAT Return form. You alone are responsible for figuring out if you sell any items that fall into these categories, what amount of VAT to charge if you do and exactly how to report those special cases. On the other hand, to give you more details about the different VAT codes that are available in the system together with their posting on your return, please scan through these links: Please feel free to post again or leave a comment should you need anything else. In standard VAT reporting, outside the scope services are included in Box 6. It can be really great for people like me who are looking for grabbing more knowledge about it. Griffin is the trading name of Griffin Audit Limited. - if this client is permanently on the 16.5% rate they are almost certainly better of swapping to normal vat unless their expenses are almost non existent or they hate the other way of working out vat. I am on a flat rate scheme. Don't invite HMRC letters. The third and final episode in my HM Revenue & Customs blogging trilogy this week concerns a new capability were opening up today. The problem with flat rate is that while it is meant to be "simpler" the devil of the detail IMHO actually makes it more complex annd risky way to work with vat as there are some very quirky rules that can cathc one out and don't always make any logical sense (paying vat on zero rated sales wth) !! Once you are registered with HMRC, they will give you a rate. Contact our Support team now on phone01277 284499. Registered as a limited company in England and Wales, number 8800970. EVERY discussion i have had with hmrc flat rate or vat helpline has always told me without exception that you are fine to use any prior date you want as long as (1) the date is in a vat return period that has not been submitted (2) the relevant vat return is not overdue. For VAT Return periods starting after 1st June 2022, import VAT accounted for using postponed VAT accounting (PVA) should not be included in your flat rate turnover. Small businesses name Xero the most-loved accounting software for the second year in a row, Heres the more specific link to Gov.uk guidance on this https://www.gov.uk/guidance/vat-reduced-rate-for-hospitality-holiday-accommodation-and-attractions#accounting-for-supplies-that-straddle-the-temporary-reduced-rate. I have a client who is registered on the flat rate scheme for VAT. Is that interpretation wrong? Tide Platform Limited (Tide) designs and operates the Tide website and app. Hi Alan, thanks for your comment. Armstrong Watson Financial Planning Limited is authorised and regulated by the Financial Conduct Authority. ****** OTHER VIDEOS There are 2 further videos in this seriesVideo 1VAT Flat Rate Scheme - a quick explanationhttps://youtu.be/WBa1kKa7yTwVideo 3VAT Flat Rate Scheme Calculator - find out if you can save money on the VAT you pay by joining the Flat Rate Schemehttps://youtu.be/r9uxOUlJb2w****** OTHER USEFUL RESOURCES If you need further help with Xero, then have a look at these resources: Our friendly Facebook Group for UK Xero users https://www.facebook.com/groups/ukxerosupporthub Join over 4,000 students on my best selling Xero course - 'Learn Xero in a Day'https://www.udemy.com/course/xero-in-a-day/?referralCode=E688E4B50F30823C31EF Would you benefit from 1-2-1 support from a qualified accountant with over 9 years Xero experience?I'm available for 1 hour online coaching by Zoom - book your place using the link below.https://app.acuityscheduling.com/schedule.php?owner=14206562 Its important to double-check that the figures entered into box 6 and box 1 are correct in relation to the accounting scheme youre using. You can also find out more on our. If you do not have a tax rate of 12.5%, you can easily create one. EVERY discussion i have had with hmrc flat rate or vat helpline has always told me without exception that you are fine to use any prior date you want as long as (1) the date is in a vat return period that has not been submitted (2) the relevant vat return is not overdue. I have never bought goods from outside the EU so have no experience of this. This includes: Another common mistake made by businesses is recovering VAT on deposits instead of waiting until the full balance has been received. By knowing where mistakes often take place you can easily avoid making them yourself. I have always done my application to leave via email application and as of yet this has alwasy worked albeit response is slow - the only annoying bit here is you dont get get an email confirmation to say your emaoil has ben received - not great bearing in mind it may be 4 months before you here from them - thankfully my requests do seem to be on file at hmrc even if not actioned as of yet. Required fields are marked *. how much VAT you charge to customers). To learn more about the VAT threshold in the UK, read our guide to the VAT threshold and when should you register for VAT , If Annual accounting scheme:-Improves cash flow as you pay VAT less frequently (in monthly or quarterly instalments), If Annual accounting scheme:-Can only reclaim input tax once a year, which is damaging if you rely on cash from reclaiming VAT throughout the year. Getting started with client engagement letters, A fool-proof marketing strategy for accountants, How digitalisation will help grow your practice, Filing options for small companies up for change. https://www.accountingweb.co.uk/tax/hmrc-policy/domestic-reverse-charge- DRC transactions are not included in the flat rate calculation, so its not a case, like zero ring, where you end up paying over VAT for something that isn't VATable. Thank you! 5. For the UK, theHMRCs FlatRate Scheme (FRS) for VAT is a beautifully simple scheme for businesses who dont have an accounting system, but a beautifully complicated scheme for businesses who do have an accounting system and want to take advantage of its benefits. Awesome news guys, this makes my simple quarterly return even simpler! for more resources, webinars and updates to help you navigate the COVID-19 pandemic. 10. Box 1 would then show 5,000. Still undecided. "The figure he needs to put on the VAT return is amount of his sales including VAT (which are 0% rated on the DRC invoices). Armstrong Watson LLP is a limited liability partnership registered in England and Wales, number OC415608. Enter the flat rate percentage which applies to your business. VAT (value-added tax) is a tax on the sales of goods and services paid by consumers. You can find a full list of UK VAT rates on different goods and services on the GOV.UK website. Its a faster and more efficient way to complete your VAT Returns, and means you wont have to pay your VAT upfront and recover it at a later date, which will help you manage your cash flow. Where VAT becomes more complicated is when it comes time to file your VAT return. Scan down the list to make sure the sales and purchase in the return all look as youre expecting, with the correct rates of VAT assigned. To enter the original bill or expense for the goods from the overseas supplier to be imported, so that it updates Box 7 on the VAT return with no vat calculated, you could use the zero rated tax rate. PPS is a trading name of Prepay Technologies Ltd which is an electronic money institution authorised by the FCA under the Electronic Money Regulations 2011 under firm reference number 900010 for the issuing of electronic money. Some purchases, such as the selling, leasing and letting of commercial land and buildings and subscriptions to membership organisations, are VAT exempt and therefore cannot be added to a VAT return. Unless otherwise indicated, either expressly or by the context, we use the word partner to However, the general rule of thumb is no evidence = no claim. Hold off on any claim until the C79 certificate proves you are the owner of the goods. Be the first to hear about our webinars, new features and business tips to help you save time and money. Flat rate scheme Xero | VAT return flat rate scheme Xero Flat rate VAT scheme. See below, or check out Xero Central for more information on creating VAT rates. A common VAT return mistake is when fuel purchased for personal use is claimed alongside fuel purchased for business travel, which often happens when a vehicle has dual business and personal use. Tip VAT registered businesses must use HMRC's Making Tax Digital (MTD) services (HMRC website) to submit VAT returns. The issuer of your Tide card will be identified on your monthly card statement. By using xero.com, you accept our cookie notice terms. From 1 October 2021, a new reduced rate of 12.5% will apply. Llp is a limited company in England and Wales, number OC415608 expertise! Scope of UK VAT rates on different goods and services paid by consumers up to introduction the... A rate each transaction/quarter without a messy workaround them its wrong within 30 days experience of this of Tide. 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