I'm sorry that this appears to have been done to death, but frankly, I'm still not 100% on this.
Business has become VAT reg on 1 September and applied for FRS at the same date.
The business sells goods to UK, EU and non-EU countries.
In short - am I right in thinking that the gross value of all of these sales must be included in the FRS calculation? Or do they exclude the non-EU sales?
The business owner is a sole trader and jointly owns rental properties with her husband. Does she need to bring in her share of the rental income as well?
Replies (4)
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Hi
Yes, you include EU & Non EU sales of goods
Have a look at sections 6.4 & 7.5 Here and/or section 4.1 Here
This is confusing because it only specifically references EU sales but the Exports are Zero rated and so should go in
If the rental income is from a separate rental business, ie it's not say renting out the self employed business premises then it's not part of this taxable business and so can be ignored.
Hope that helps and never be fooled by talk of FRS being a simplification!
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Yes, you include EU & Non EU sales of goods
Have a look at sections 6.4 & 7.5 Here and/or section 4.1 Here
This is confusing because it only specifically references EU sales but the Exports are Zero rated and so should go in
http://www.hmrc.gov.uk/VAT/managing/international/exports/index.htm
clarifies the situation with respect to non-EU goods, Paul - i.e. to be included in FRS turnover as zero-rated. It also illuminates the "place of supply" circumstances surrounding non-EU services - an issue that is particularly relevant to FRS turnover.
Check whether FRS is advantageous by making a calculation using previous year's or projected figures. If there is a problem, try to ask HMRC to disregard the FRS application.
I agree with Paul Scholes's conclusion but not his analysis.
The property rental income is excluded from the FRS calculation due to its joint ownership, not due to it not being part of his taxable business..
It is not relevant that the property is not his business premises.