Required fields are marked *. It will be released well before you need to deal with your first VAT Return in the new year. You have clicked a link to a site outside of the QuickBooks or ProFile Communities. Tide offers bank accounts provided by ClearBank Ltd (ClearBank) (account sort code is 04-06-05). 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. Despite our best efforts, mistakes can happen. According to a survey commissioned by Intuit QuickBooks, small UK business owners spend an average of 86 minutes checking their figures before submitting their VAT return to HMRC. for more information on creating VAT rates. The difference (usually a saving), will need to be journalled to the appropriate account by someone with the Adviser user role. The flat rate percentage is applied when you calculate your VAT Return. ****** 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 Thanks to the author for sharing such a great post. Ive sent a request through to the team that looks after Xero Central and asked them to update it. Here's how: You can track feature requests through theQuickBooks Online Feature Requestswebsite. is regulated by the Institute of Chartered Accountants in England and Wales for a range of investment business So I should post invoices received from EC Suppliers with VAT Code Zero Rated Expenses as I would for invoices from non-EC Suppliers? With this scheme you pay HMRC a fixed rate of VAT, based on your sales, and do not claim back VAT on your individual purchases. If your status is Failed, click on the VAT Return link to read the error message, or read the notification in your Xero inbox. Personal expenses are exempt too, although you may be able to claim a proportion of the VAT back on an item that has dual business and personal use. You can find some information about adjusting the amounts on a VAT return here. Although I think you may be being a little harsh on our green friends. About adjusting your VAT return Adjust the VAT box amount only Adjust the VAT box amount by adding an accounting transaction By understanding where VAT return errors commonly occur and what HMRC expects of you, you can reduce your risk of making a mistake to reclaim what youre owed. Your email address will not be published. How to do a VAT Return in Xero XU Academy 6.4K subscribers Subscribe 514 Share 34K views 4 years ago VAT in Xero In this video I show you how to do a VAT return in Xero. Expert guide to CIS and new reverse charge rules, Getting started with client engagement letters, A fool-proof marketing strategy for accountants. With Postponed VAT Accounting wed generally think the initial overseas purchases be treated as zero rated because VAT is not assessed on the initial purchase, its assessed when it comes through HMRC/Customs agent in UK. Tide is about doing what you love. ". Our monthly bulletin INSPIRED is packed with useful articles to keep you up to date with news and legislation that may affect you or your business. It can be really great for people like me who are looking for grabbing more knowledge about it. Without getting into the full details, essentially the VAT paid on any import does not equate to exactly 20%, and each import will be a slightly different percentage (based on; exchange rate differences, assumed transportation cost and associated VAT, and customs own "VAT Adjustments" (whatever they are)). Type in your feedback or product suggestions. The exception will notify HMRC that the transaction has been accounted for within the current period but refers to a previously filed period. 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. Small businesses name Xero the most-loved accounting software for the second year in a row. Apologies if any of above is wrong peeps. When creating a VAT Return in Xero next year, youll just need to select the PVA option button and add the amount from your MPIVS. I hope it's in order to generate a new post for an old chestnut (its age means it no longer invites responses). The most common mistake made with import VAT is reclaiming VAT on receipt of invoices from shipping agents. It will be released well before you need to deal with your first VAT Return in the new year. With the ongoing situation around COVID-19 and Britains withdrawal from the EU (Brexit), as well as HMRCs drive towards making VAT easier for VAT-registered companies, theres likely to be new rules and regulations to come. Regarding box 6, it is only one sentence which I am bothered by (see in bold text below): Box 6 Total value of salesEnter the turnover to which you applied your flat rate percentage, including VAT. This will remain in effect until 31 March 2022. Reporting - it just keeps getting better! The registered Reporting - it just keeps getting better! You can also find out more on our Brexit Hub. VAT, or value-added tax, is relatively straightforward in theory. This will remain in effect until 31 March 2022. The Top Tip: You have to register for VAT when you reach the VAT threshold. Without getting into the full details, essentially the VAT paid on any import does not equate to exactly 20%, and each import will be a slightly different percentage (based on; exchange rate differences, assumed transportation cost and associated VAT, and customs own "VAT Adjustments" (whatever they are)). Save my name and email in this browser for the next time I post a comment. This table explains each scheme in more detail. But the rule has another side that often goes overlooked: you cant claim bad debt relief until after six months from the due date. The VAT Flat Rate Scheme is an alternative way for small businesses to calculate VAT due to HMRC. Armstrong Watson Audit Limited is registered to carry on audit work in the UK by the Institute of Chartered So if box 1 on Rachels next tax return was 6,000, she would add 300 to pay back what she owes, making the revised figure 6,300. Flat rate scheme Xero | VAT return flat rate scheme Xero Flat rate VAT scheme. MTDfV stands for Making Tax Digital for VAT a program introduced by the government to make submitting VAT returns easier by helping businesses store records digitally to automate payments and returns. There's a few changes to your VAT rates required - so please take care to check with your accountant to ensure you know the rules, such as the VAT reporting requirements you need to be mindful of if you switch mid-quarter etc., and then switch on the FRS from the Financial Settings page in Xero. Box 1 would then show 5,000. 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. 10.8.1 Flat Rate Scheme 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.". As we are not across any specifics about your business or how you normally do things we must be mindful not to provide accounting advise we recommend that you speak with your Xero Certified Adviser for specific advise regarding your situation. If youre using the cash accounting scheme or the standard accounting scheme, box 6 should include your income net of VAT. Be the first to hear about our webinars, new features and business tips to help you save time and money. Filling in the return if you use a VAT Accounting Scheme 5. Business Tax Account 6.. Armstrong Watson Financial Planning Limited is authorised and regulated by the Financial Conduct Authority. Unless otherwise indicated, either expressly or by the context, we use the word partner to Xeros function for postponed VAT accounting calculations specifically state that they wont work with the flat rate scheme so currently the easiest way to account for import VAT is to refer to your monthly PVA statements and then manually adjust the VAT Return via a journal. Your email address will not be published. "As outside the scope they have, by definition, not been "accounted for" They mean accounted for as a VAT entry.". We use cookies to make your experience better. Errors that exceed the threshold must be reported and cannot be adjusted on a future VAT return. His employer are now not paying the VAT on his invoices and paying them directly to HMRC. Ta all. Your box 6 figure will be 30,000 and your box 1 figure for 'VAT due on sales and other outputs' will be 4,350 (14.5% x 30,000). Run your flat rate MTD VAT return Before you start Check that your VAT scheme and VAT number are correct in your financial settings. He works in the construction industry and is Gross Status. The good news is that as of today, Xero now supports the Flat Rate Scheme and we promise to keep it simple for you. 10. Is this correct - i thought it was simply the case that such sales were excluded from the the flat rate scheme in which case normal reverse charge rules would apply (ie no output vat and value of sale being included in box 6) . 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. Apply a Postponed VAT Accounting (PVA) adjustment. Monitor your VAT account in an accounting system. Placing someone in charge of dealing with VAT day-to-day will help to avoid any confusion around tax and ensure records are consistent. Get up to speed on what information you must include on your VAT invoice . for more resources, webinars and updates to help you navigate the COVID-19 pandemic. have a UK business that is registered for VAT, import business goods to the UK valued at more than 135 (exclusive of VAT), elect to use PVA on the customs declaration, use your own VAT registration and EORI numbers on the customs declaration, We have developed a PVA update in Xero. 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. Both the flat rate scheme and Making Tax Digital are recent changes that have transformed VAT treatment for small businesses. 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. Still undecided. Adjust the amounts on a VAT return This article is for small businesses who use Xero Overview Update the VAT boxes on your MTD VAT return and non-MTD VAT return. This is usually received around three weeks after the end of the month you received the goods in the UK. Following on from my explanation of the Flat Rate Scheme for VAT, this video looks at how it works in Xero. Introduction How the Flat Rate Scheme for VAT works in Xero XU Academy 6.25K subscribers Subscribe 80 Share 3.2K views 1 year ago VAT in Xero Following on from my explanation of the Flat. Photo by Kate Oseen, published on Unsplash. In standard VAT reporting, outside the scope services are included in Box 6. 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