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SA800 query

box 3.5 and 3.36 entries for flat rate vat scheme

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Really appreciate if anyone could anyone throw me a bone on this please. New financial year and we are no longer registered for vat, so just need to go through the pain this once, for last financial year.

Basically we are on the flat rate scheme. ( 12% ).  We were only registered for part of our the financial year.  ( won't go into the why's ).

So anyway, I taking option 1 of 2 in the SA800 for VAT registered on flat rate scheme and putting all the numbers in without the vat.   Not an problem except for a couple of pesky box's. ( always the way )

The help sheet says....

"If you use method 1, include:

• at box 3.50 any balance on your VAT account that is not paid over to us (that’s, the amount of VAT on your income which exceeds the VAT that you’ve paid on your expenses plus the payment under the Flat Rate Scheme)

• at box 3.63 any balance on your VAT account that you cannot recover from us (that’s, the VAT on your expenses plus the payment under the Flat Rate Scheme minus the VAT on your income)" 

My interpretation and shaky understanding of this is  ..... 

box 3.50 entry is ....       

The amount of vat we charged at the 20% standard rate on all sales during the time we were registered - ( total vat portion of our expenses +  12% flat rate vat portion of sales ).

At little example for my own reference :

if our sales inc vat was say £1000, then the amount net of vat would be 1000/120*100 =   833.33      So under option 1 i'd be putting 833 as total sales in the sa800.    If our expenses came to 150 inc vat i would deduct the vat portion, £25 ( as not tax deductable ) and so the expenses entry net of vat would be  £125 in the appropriate SA800 box.     

The flat rate scheme vat we are actually going to be paying, is 12% of total sales.   so 1000/112*100 = 892.85.    So we pay 1000-892.85 = £107.15 vat on flat rate scheme

so the 3 figures to bring to the box 3.50 calculation would be  a) 1000-833.33 = 166.67 vat charged at 20%      b)  £25 ( vat portion of expenses      c ) 107.15 (vat amount based on 12% FRS )

    So box 3.5 entry =    166.67 - ( 25 + 107.15 ) =    £34.52

_________________

    Box 3.6 entry, again using the example sales and expenses totals above, would be :

   ( 25+107.15 ) - 166.67 =  -£34.52

 

Appreciate any confirmation im on the right path.

thanks

 

 

Replies (10)

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Scalloway Castle
By scalloway
08th Apr 2020 22:27

Would it not simpler just showing your sales less the flat rate VAT paid over and all your expenses gross?

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Replying to scalloway:
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By max-6
09th Apr 2020 07:56

Hi Scalloway. Thanks for the suggestion.
I definately considered chosing option 2 ( all vat inclusive ). But decided against it as we were only registered for part year. It would be more confusing ( for me anyway ).
Id be ticking boxs elsewhere to say the figures were inc vat...when in fact only a % of total was vat included. Same with expenses. And thats before rent, wages etc that had no vat in. Id be messing with figures all over the place.

Probably just how im getting my head around it, but option 1 ( entering figures exc vat ) is the one for me. Just those 2 pesky boxs to figure out and im home free ...

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Replying to max-6:
Scalloway Castle
By scalloway
09th Apr 2020 08:36

I do not think that HMRC will be that bothered about the precise amount of VAT not included in your expenses. Unless you have some overwhelming business need to show things as you propose you are creating uneccessary work for your self.

And as Matrix says your accounting software should do all the work for you. All you need to do is take the balance of unclaimed VAT on expenses in the VAT account and write it off as an expense.

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My photo
By Matrix
09th Apr 2020 08:10

I don’t really get what you are asking. Wouldn’t you already have done all this in your bookkeeping software, so can’t you just use these figures?

Why do you say that the £25 VAT on expenses is not deductible?

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Replying to Matrix:
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By max-6
09th Apr 2020 09:03

Guys, really appreciate your help on this.

1. The £25 in my example is not tax deductable because its the vat portion of my expense. In a flat rate vat scheme you cannot claim the vat portion of expenses. Happy to stand corrected if this is not true.

I haven't made these 2 boxs up. Wish i had. They exist on the s800
Form as pointed out in my initial post. Also the methods for filling these in are stated on the sa800 help sheet. ( just not clear enough for me apparently hence my post here)

So all im asking is if, using my example above, im referencing the correct figures in order to calculate the total that goes in the box's, based on the instructions given by hmrc in their help document.

Ps, its only example figures ive used. I could only dream of 150 expenses.

Im sure there are lots of more efficient ways of doing this. But its a 1 off for me. Im happy to take 5 mins to calc the figures.

All im asking is does my logic ( in the example given ), follow what hmrc have specifically asked for in the sa800 help doc ( quoted in top post ) in order to complete the 2 box's.

Thanks.

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By Duggimon
09th Apr 2020 10:15

Box 3.50 is your flat rate scheme saving. You take the VAT you would have paid under the standard scheme, take away the VAT you actually had to pay under the flat rate scheme and put that figure in.

If you do that using input VAT in the calculation then there's nothing to put in 3.63. If you do that purely with reference to the O/VAT, then the unclaimed I/VAT goes in 3.63.

Your calculation example is counting the £25 VAT on your expenses twice.

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Replying to Duggimon:
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By max-6
09th Apr 2020 12:10

ok, nearly there. My light bulb moment is due any minute...

I think what is really throwing me is the basic premise that when registered on the flat rate scheme, you cannot recover the vat portion of expenses.

but then the guidance for calculating the box 3.50 total says ....

• at box 3.50 any balance on your VAT account that is not paid over to us (that’s, the amount of VAT on your income which exceeds the VAT that you’ve paid on your expenses plus the payment under the Flat Rate Scheme)

So suddenly im doing a calculation that "includes" the amount of vat on my expenses . Can you see my confusion.

_________________

And similar for the Box 3.6 entry guidance...

• at box 3.63 any balance on your VAT account that you cannot recover from us (that’s, the VAT on your expenses plus the payment under the Flat Rate Scheme minus the VAT on your income)" )

_________________

Perhaps, its just some quirky thing that although Flat rate scheme members
cannot reclaim any VAT in our expenses, they allow me to do a couple of one off calculation "that do include the amount of vat on my expenses ) ??

The guidance also suggests that "both" box's are to filled in. Not sure why as if i they come to the same total, except the 3.63 box is negative.

For the rest of the reported numbers in the SA800 ( total sales, expenses etc ) i have stripped out the vat before entering the totals.

appreciate everyone's input on this.

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Scalloway Castle
By scalloway
09th Apr 2020 13:56

You are over thinking things. There are two ways to deal with Flat Rate VAT on your SA800

1. Deduct your Flat Rate VAT % paid over from your sales and include all your expenses with VAT included.

2. Show all figures net of VAT. You will end up with a balance on your VAT account .

Box 3.50 - if you have recovered more VAT than you would have under the standard scheme put the balance in here.

Box 3.63 if you have paid over more VAT than you would have under the standard scheme put the balance in here.

Only one box need be completed.

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Replying to scalloway:
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By max-6
09th Apr 2020 14:36

thanks Scalloway.

Perhaps the revenue should hire you to tweak a few of their help files.

cheers

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Replying to max-6:
Scalloway Castle
By scalloway
09th Apr 2020 15:44

I find that quite often help files are written by people who know what they are looking for, not by people who look at it from the perspective of a user who lacks in depth knowledge of the subject.

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