I have a CIS client under FRS. They provide services to end users (landlords mainly) so they are not subject to DRC. They recently received an invoice from one of their subcontractor which is subject to DRC, so they kept the VAT portion to pay HMRC through their VAT return. The invoice has been recorded in Quickbooks using the Reverse charge (RC) code. However, when proces the VAT return at the end of the quarter, that transaction did not apprear in the VAT return in Quickbooks. QB is now saying their software does not support RC on flat rate scheme. My concern is, is it the issue for QB or FRS businesses cannot not deal with their subcontractors RC at all. How are they going to pay the VAT they kept to HMRC then?
14th Oct 2021
Domestic reverse charge and FRS
How to pay subcontractors VAT under the flat rate scheme
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