Due to the recent changes in legislation, I am thinking of leaving the VAT Flat Rate Scheme and moving to standard VAT accounting for my (contractor) LTD Company.
I understand how the FRS has worked for me and how the profit from it is directly linked into my P&L account and thus how I am directly benfitting from it once I take my dividends etc.
However with standard VAT, am very confused as to how the recoverable input VAT that I will earn every quarter will be treated in my accounts and most importantly, how am I able to draw this recovered VAT from the business as it is essentially profit I have made?
Basically, it was clear to me how my profits from the Flat Rate Scheme end up "in my pocket", but with standard VAT I don't understand how this will happen and how it would be accounted for.
Apologoes if any of the above shows a fundamental lack of understanding, but I am really struggling to find an answer.