VAT Flat Rate Scheme & Sage

Conflicting views on how to post in Sage using Flat Rate scheme

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Anyone using Sage Accounts on VAT flat rate scheme. Set up all info in Co Settings.  Sage advise to post all transacations as if on standard scheme ie sales at T1, vatable purchases T1 etc.  The VAT return then calculates the flat rate correctly, and vat return is correct, plus there's  a report that shows a gain/loss from using scheme. I thought the gain would be shown in P&L as Other income per FRS.   Others though I have read post everything at T9 so the P&L effectively gross and then simply journal the flat rate % vat out of sales each quarter.  So what is the correct way?  Help!

Replies (8)

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By Sandnickel
19th Jun 2024 09:02

Neither are incorrect. FRS was designed to simplify the record keeping so arguably the second method is the intended method.

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By Paul Crowley
19th Jun 2024 09:15

We post gross, with VAT paid deducted against income.
But we do not have any flat rate people using sage.

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John Toon profile picture
By John Toon
19th Jun 2024 11:37

Not done this for ages on Sage, but do they not adjust the VAT "profit" to other income on finalising the return?

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Chris Downing
By Chris Downing
19th Jun 2024 17:20

Step by step guide here:
https://gb-kb.sage.com/portal/app/portlets/results/viewsolution.jsp?solu...

In the past would have posted sales to the P&L net of VAT, then journaled the gain to another sales code on a quarterly basis to easily monitor the benefits of FRS

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Replying to cdowning.ml:
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By victoriarchalmers
20th Jun 2024 11:20

This where we have followed posting everything net to P&L as normal, but others are saying it should be gross and only sales adjusted by the flat rate % in P&L, hence the confusion. lol

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Replying to victoriarchalmers:
Chris Downing
By Chris Downing
20th Jun 2024 12:14

Post net for sure - makes far more sense, allows monitoring of effectiveness of the FRS, reduces the risk of error too!

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Replying to cdowning.ml:
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By victoriarchalmers
20th Jun 2024 12:38

That's my thoughts so will stick with that.
Thank you

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By tracey2412
27th Jun 2024 11:45

I was going to ask Sage 50 or Sage Cloud as it could be different either way but I see @chris downing has already replied so figure you're sorted.

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