FRS VAT & Income Tax

FRS VAT & Income Tax

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Hi All

In need of clarification

Resturant is flat rate vat registered after 3 months into tax year.

Sales of £97,421.08

VAT Charged to customers is £11,714.59

Net Sales is £85,706.48

FRS VAT Paid is £8,083.07

In his self assessment tax return, I need to record his income.

I have taken income to be Net £85,706.48 + FRS Gain which is £3,631.52 = £89,338.01

OR should it be gross £97,421 to go into turnover and VAT paid £8,083.07 into allowable expenses

Please advise

Thanks

Replies (5)

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By Tim Vane
28th Jan 2016 11:13

Enter the gross less FRS and then irrecoverable input VAT as an expense.

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RLI
By lionofludesch
28th Jan 2016 12:41

Disagree with my learned colleague

Your turnover shouldn't be affected by being on FRS.

The starting point should be the net sales of £85706.

You'll be left with a credit of £3631, which is "Other business income".

Thanks (0)
By Duggimon
28th Jan 2016 12:45

Income or turnover?

The OP switches between both, income most definitely is affected by FRS, turnover is not.

I would be more concerned about the actual amounts of VAT which seem rather low.

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Replying to marlin:
RLI
By lionofludesch
28th Jan 2016 12:58

True

Duggimon wrote:

The OP switches between both, income most definitely is affected by FRS, turnover is not.

Perhaps he'd clarify.

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Teignmouth
By Paul Scholes
28th Jan 2016 15:06

Whatever is easiest

As long as you get to the right profit, HMRC won't worry.  Different bookkeeping systems use differing methods, which illustrates that there is no hard & fast rule.

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