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What are purchases on FRS for sameday courier?

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Thinking of going FRS for vat.

My turnover is approx £43000 per annum

Fuel is approx £13500 per annum

Insurance is £1900 per annum

Road tax, mot and repairs are approx £800 per annum

Mielage per annum is 100000 approx

Have my own wholly owned vehicle (Transit van)

FRS of 10% applies

Q1. Can any of the above be put on purchases section of FRS vate return form?

Q2. Does the new 'Limited cost traders' apply to couriers?

Thankyou

 

Replies (11)

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By Ruddles
10th Mar 2017 20:45

Assuming that you're already registered

1. No
2. Yes

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By Gazza3000
10th Mar 2017 21:16

Yes

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By tom123
11th Mar 2017 09:02

I would have thought that couriers fall within this comment:

Exclude the following items:
vehicles, vehicle parts and fuel (except where the business is one that carries out transport services - for example a taxi business - and uses its own or a leased vehicle to carry out those services)

Or does delivery work not count as 'transport services'?

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By stephenkendrew
11th Mar 2017 09:07

I agree with Tom.

The 10% Flat Rate for transport uses the definition "Transport or storage, including couriers, freight, removals and taxis".

The new guidance makes it clear that fuel for a taxi business is classed as goods so I see no reason why fuel for a courier would not be classed as goods.

Based on your figures you are not a limited cost trader.

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Replying to stephenkendrew:
By Ruddles
11th Mar 2017 10:51

Depends on whether he is on annual accounting or not. To repeat the point I made earlier, the new rules apply to EVERY FRS user - there are no specific exclusions or exemptions for particular categories of business. It is possible, albeit unlikely in many cases, that a business that would clearly appear to be outside the rules might be caught for one return period. Even if that is for only one period during the entire lifetime of the business.

The point being that the majority of FRS businesses will need to keep sufficiently detailed records to allow them to check each and every period whether or not they are caught. The FRS scheme a simplification? Pah!

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By tom123
11th Mar 2017 13:27

That's going to be a real drag, isn't it - I think (if it were my role) I would be advising as many people as possible to convert to standard VAT. Who wants to be messing around quarter after quarter - still, it will get people used to the idea of the hassle that is going to be MTD..

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Replying to tom123:
By Ruddles
11th Mar 2017 13:37

To be fair, I'm just ranting. It's probably safe to assume that the OP will never be caught.

However, that doesn't change the principle and there are bound to be traders that, without changing anything, would find themselves having to use 16.5% in some quarters and normal % in others.

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Replying to Ruddles:
RLI
By lionofludesch
11th Mar 2017 15:23

Ruddles wrote:
To repeat the point I made earlier, the new rules apply to EVERY FRS user - there are no specific exclusions or exemptions for particular categories of business.

A more thorough reading of the LCT blurb suggests that this is not so.

"Goods, for the purposes of this measure, must be used exclusively for the purpose of the business but exclude the following items:

capital expenditure
food or drink for consumption by the flat rate business or its employees
vehicles, vehicle parts and fuel (except where the business is one that carries out transport services - for example a taxi business - and uses its own or a leased vehicle to carry out those services)"

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Replying to lionofludesch:
By Ruddles
11th Mar 2017 16:38

I'll confess that my words are ambiguous.

I meant that no particular businesses are excluded from the rules.

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Replying to Ruddles:
RLI
By lionofludesch
11th Mar 2017 16:43

Agree. It's just that the rules are different for transport businesses.

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RLI
By lionofludesch
11th Mar 2017 15:19

Transport services so motor expenses aren't excluded from your purchases of goods.

Fuel's grand. Licence and insurance isn't. Servicing is a tricky one as it's part goods, part services.

However, I expect fuel to carry you across the 2%/£1000 Rubicon.

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