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Flat rate vat scheme and cost of sales

Flat rate vat scheme and cost of sales

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Rather interesting phonecall with a client.  He says on the grapevine there is an accountant giving advice how to qualfy for a lower flat rate percentage by asking his clients to 'make up' cost of sales.  The accountant is then backdating vat registration for his clients on a low FRS, thus client making money.  Sadly lots of clients are discussing this and moving towards this accountant.  Through another conversation with an old client (whom we still have discussions) his accountant is also offering this new service!  What annoys me is my clients are now asking why I am not offering this as surely it would be in their best interest.  Shocking after 30 years in the industry this is what it's coming to.  I cant report the accountant because he has been removed from his governing body (not sure whether voluntary or pushed but his clients dont seem to care anyway)  Has anyone else experienced these problems?

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By Les Howard
20th Nov 2019 13:21

Presumably if someone 'makes up' cost of sales, that is dishonest!?
(Or am I being naïve?)

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By lionofludesch
20th Nov 2019 13:38

What are we saying here ?

Estimates instead of reality for cost of sales ? Or some sort of cobbled-together-unofficial-made-up-flat-rate-percentage ?

Never mind his professional body. Report him to HMRC.

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By atleastisoundknowledgable...
20th Nov 2019 18:05

Like the R&D claim companies who can fabricate an entire claim based on you payroll summaries.
Like the CIS/HGV tax advisers who know your expenses before you even speak to them.

Wasn’t there someone asking questions on here a few months ago who got slated for having a ‘firm’ of this ilk. Can’t remember exactly what their particular scam was.

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