Remaining VAT amount inclusive in company income?

[computerguru]

Hi guys,

I have a quick question regarding the VAT and company profit

Consider the following scenario

Company A has generated a total invoice in one year = £100,000+20,000 (VAT)= 120,000

Company A has paid VAT (flat rate) in one year = £120,000*0.145=£17400

Remaining amount = £102,600

Lets assume this company has no other expenses and all of this £102,600 is the income.
Now

do you have to declare £102,600 as income and pay corporation tax on £102,600 which equates to £20,520

OR

do you have to declare £100,000 as income and pay corporation tax on £100,000 which equates to £20,000?


Thanks

[Darren at Fox-Bartfield]

VAT

It's the £102,600, any profit made on the FRS is taxable.

[northernladuk]

A couple of seconds on Google and I found this..

Contractors' Questions: How to handle profit from VAT Flat Rate Scheme? :: Contractor UK

and this..

VAT Profit from Flat rate scheme - Tax Forum :: Free Tax Advice

and this..

Flat Rate VAT Scheme Guide (FRS)

and many more examples that answer your question perfectly.

[TheFaQQer]

do you have to declare £102,600 as income and pay corporation tax on £102,600 which equates to £20,520
OR
do you have to declare £100,000 as income and pay corporation tax on £100,000 which equates to £20,000?

Neither. You pay corporation tax on profit, not income.

[Boo]

Neither. You pay corporation tax on profit, not income.

I think the OP knows this from the statement :

Lets assume this company has no other expenses and all of this £102,600 is the income.

Boo