Hi All,
This is a sage accounting questions and a general knowledge question (which hopefully somebody can answer for me!).
We are operating a standard 9% flat rate vat scheme using sage accounting. We have followed sage's instructions and raised invoices and entered purchases inclusive of 20% vat. When we run the vat return it cleverly ignores what I've entered and just calculates the 9% on our gross turnover. So far, so good.
But, the net figures in my profit & loss are net 20%, which now has no relevance to my business profits? (I've not declared/claimed 20% input/output vat)
And, if somebody knows the answer to this (as I cannot find a definitive (any) answer on the HMRC website) what figures does a flat rate vat business declare on the tax return?
- gross turnover, less vat paid = taxable income
- gross turnover, less gross expenses = taxable income
- gross turnover, less vat paid, less gross expenses = taxable income
(and if I need gross figures for my accounts, why am I accounting for 20% vat on my expenses?)
So much for a simpler vat system!
Thank you, Pammers
