Does the flat rate scheme of 8.5% apply to all invoices for a vehicle repairer if part of his services is servicing the vehicle and not solely repairing? Does the normal VAT accrual apply to services outside the FRS?
Replies (5)
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Ouch!
You might want to edit your question as it's difficult to gauge if you are 'nearly there' or 'clueless'. For starters you do realise that standard VAT on his invoices will continue to be 20% if he is in FRS?
FRS
If you are on flat rate VAT scheme then that's what you use for all income streams. There is no mixing of different VAT schemes.
Best fit
You look for the best fit of your client's business activity with the list supplied by HMRC and use that % rate for all supplies. If the nature of your client's business changes over time they might need to switch to a different activity. Whatever, you should keep a record of why a particular activity was chosen. Also, remember the FRS rate is based on the value of gross supplies, not the net. Oh and sorry if I sounded harsh earlier.