Got a letter from HMRC that my Limited company is being removed from Flat rate Scheme. Turnover was only above £230,000 if I INCLUDE VAT in calculating turnover. Is is correct? I though turnover does not include VAT?
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Removal from Flat Rate Vat Scheme
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Originally posted by StrengthInNumbers View PostGot a letter from HMRC that my Limited company is being removed from Flat rate Scheme. Turnover was only above £230,000 if I INCLUDE VAT in calculating turnover. Is is correct? I though turnover does not include VAT? -
Looks like that's correct - thresholds are excluding for joining, including for leaving.
InfoZone - Lots of other sites saying the same.
Turnover limits
You can only apply to use the Flat Rate Scheme if you expect your annual taxable turnover in the next 12 months to be no more than £150,000, excluding VAT.
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Businesses must also leave the scheme:
On the anniversary of joining the scheme if your previous year's VAT-inclusive turnover was more than £230,000;
HMRC describe how to calculate Flat Rate Turnover
https://www.gov.uk/government/public...-rate-turnover
"the VAT inclusive sales and takings for standard rate, zero rate and reduced rate supplies"Comment
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Originally posted by StrengthInNumbers View PostGot a letter from HMRC that my Limited company is being removed from Flat rate Scheme. Turnover was only above £230,000 if I INCLUDE VAT in calculating turnover. Is is correct? I though turnover does not include VAT?Comment
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Now that you know the threshold more accurately.
If you can "mange" to keep it below - write to them and they will let you register again. In fact you do not even have to register - they will simply send you a letter to acknowledge.Comment
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Originally posted by PerfectStorm View PostOn the plus side you can now claim VAT on your lunch.Comment
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Originally posted by mudskipper View PostLooks like that's correct - thresholds are excluding for joining, including for leaving.
Businesses must also leave the scheme:
On the anniversary of joining the scheme if your previous year's VAT-inclusive turnover was more than £230,000;
Which, in a 'really good year' (no gaps, some holiday time) could be 47 weeks work which means you can generate around £800/day before having to quit FRS.
Whilst most of us can only dream of that as a day rate, it's not entirely unrealistic if you've 2 fee-earners in the company - as I do, though currently we've got some "gap" to use up before we would hit £800/day... still its good to have that figure in mind next time there a new contract or renewal rate negotiation.Comment
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