How to combine VAT schemes on a single return

Client changed VAT schemes inside a return period from Standard to Flat Rate

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I have a client who changed from the Standard to Flat Rate scheme inside a VAT period. He uses Quickbooks which only allows one or the other, not both. His VAT period was from 1 April to 30 June. He was accepted on Flat Rate from 14 June. I use Bridging Software to submit returns. I know how to submit both Standard and Flat Rate returns but how can I combine the two on a single return, or do I assume Flat Rate from 1 April. Customs & Excise told me I cannot submit two seperate returns but were otherwise no help whatsoever. Does anyone have any suggestions please?

Replies (3)

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By Leywood
30th Jul 2023 12:53

Don’t assume.

Are you sure about the actual start date? Usually at least 1st of month.

Mid quarter changes, just do any required journaling adjustments in QB before you upload to your bridging software.

Thanks (1)
Replying to Leywood:
By lionofludesch
30th Jul 2023 13:58

I'd echo that. Being accepted on 14 June and a start date of 14 June are very different things.

Thanks (1)
By Jason Croke
31st Jul 2023 08:10

FRS usually starts at the start of a month.

Whatever the start date, it was not best to switch schemes mid quarter as it just makes for additional effort. As Leywood has posted, make any journal adjustments in QB and then run the return.

You will first run the VAT return for the whole quarter, then you will have to manually calculate output tax VAT at the flat rate from the 14th June to end of June and also remove the non-flat rate output tax from 14th June to month end. Do the same on the input tax side, reclaiming input tax up to 14th June and thereafter no input tax recovery (subject to the usual £2k capital items rule).

Once you've manually calculated that, reflect those adjustments in QB as journals and then when you run the VAT return again, it will reflect the correct position, you can then use your bridging software to file the return.

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