Leaving Flat-Rate VAT

sandy's Avatar

sandy

10 Apr, 2017 02:54 PM

Hi, the UK tax authority is changing the rules and rates for the flat-rate VAT scheme, with effect from 1 April 2017. As a result I am leaving the flat-rate scheme. I'm concerned how to do this cleanly within Easy-Books. Do I just complete the previous quarter's VAT return, and then change the VAT settings, or is it a more complex change? I'm sure I'm not the only person facing this change! Many thanks.

  1. Support Staff 1 Posted by Mathew on 12 Apr, 2017 12:27 PM

    Mathew's Avatar

    Hi Sandy,

    If you're changing from one scheme to another at the start of a new VAT period, it's easier than if you're changing mid-period. But you can still handle both cases, it's just a bit more work midway through.

    I should say I'm not qualified to answer tax questions, you should speak to your accountant to check what I'm saying.

    If you are changing schemes midway through the cycle, you will have to split the VAT period and run the existing scheme for the remainder of the time under the fixed rate scheme (and 'file' it). Then you'll update to the new scheme, set the actual period end date and wait until the date passes.

    Here's my suggestion to look into. At the point where you are no longer able to use the fixed rate, set that date as your next VAT period end and run the report (e.g. 31 March 2017). Use the app to "File Return" and it will calculate and give you the amount you owe to HMRC under that fixed rate scheme. Save that report somewhere - maybe by email. Then change the scheme under business settings and set the period end date back to whatever it should be - possibly 30 April 2017? You will just need to handle the next VAT submission manually, but summing the appropriate columns but the app will give you what you need in two separate reports.

    If you don't have an accountant, have a look at https://easybooksapp.com/support/accountants for a short UK based list. I know Alastair and Julie both use Easy Books and can sync with your data if you need them to. They could then handle all this for you!

    All the best,

    Mathew

  2. Support Staff 2 Posted by Mathew on 12 Apr, 2017 12:58 PM

    Mathew's Avatar

    Oh, I also turned up this link from Alastair's website (an accountant who uses Easy Books). It might help you:

    http://awaccs.co.uk/leaving-the-vat-flat-rate-scheme/

    Mathew

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