Gain on Vat using flat rate scheme

Gain on Vat using flat rate scheme

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Does it getting credited to sales or to other income?
Toni

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By timmcarr
10th Jul 2007 16:15

Sales is the only item subject to VAT on the flat rate scheme so I usually put any differences there. No need to complicate things by calling it other income. It is a direct result of buying and selling and the accompanying tax that goes with it.

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By andyjdicker
11th Jul 2007 14:37

There shouldn't be any
There shouldn't really be any 'gain' on using the Flat Rate scheme shown in the accounts. You should be recording all purchases as Gross of Vat, with no Vat deducted, and sales net of VAT using the flat rate scheme....

I understand what you mean, in that there will be gain or loss due to the fact you will be paying a different amount of VAT under the flat rate scheme than the normal scheme, but I wouldn't show it in the accounts that way.

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