Limited Cost Traders for New Flat Rate Scheme ??

Does the definition of goods include services that are within cost of sales (e.g agent's commission)

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I'm about to process the VAT application for an actor, usually the flat rate scheme is most appropriate at 12.5%. In order to get work, they suffer agents commission of around 12.5% + VAT which is a direct cost of sale.

Is it intended that the expenditure on 'goods' be expanded to expenditure on 'cost of sales' .... or are they too caught by the definition?

 

Thank you

Replies (4)

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RLI
By lionofludesch
23rd Feb 2017 11:58

No.

Services aren't goods. They're services.

Sorry for stating the obvious.

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JCACE
By jcace
23rd Feb 2017 15:55

It will be interesting to see what the final legislation says and what additional guidance HMRC provide, if any.

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By Matrix
23rd Feb 2017 16:17

I doubt the savings under the FRS are very big. He would probably be better moving to standard VAT accounting.

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Replying to Matrix:
RLI
By lionofludesch
23rd Feb 2017 16:24

Quote:

I doubt the savings under the FRS are very big. He would probably be better moving to standard VAT accounting.

The sums show that he gets to keep 1% of the output tax he charges (assuming it's all standard rate).

Bearing in mind he can only be on FRS if his turnover is relatively low, that'll end up being [***] all.

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