Do you have an accountant BB?
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Making Tax Digital
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Originally posted by MrButton View PostIf you are correct then you are probably better off on the FRS.
But most here are IT contractors where it seems almost impossible to not be a LCT.
If Bluebird does qualify to use the 14.5% rate, then the point at which it is no longer worth being on the FRS is when taxable expenses (i.e. where input VAT can be reclaimed, and not just 'relevant goods') exceed 13% of turnover (the 13% figure is only for the 14.5% FRS rate).
In my experience, this applies to very few IT contractors, as the cost base of these businesses does not often include many relevant goods. There will always be exceptions to this though.Comment
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Originally posted by Bluebird View PostWith the introduction of the above - does anyone know of any products that are free?
At the moment I do all the accounts myself on excel, but from March will need to use a tool to submit - unless I stay under the 85k turnover threshold.
Thanks BBComment
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Originally posted by Bluebird View PostNo, not limited cost trader.
There's not many things that count to making you not a LCT.
Accountancy fees, expenses (hotels, travel, food), computers (other than for resale), rent, anything bought purely for the purposes of getting you out of the LCT bracket; are all not counted.
All you're left with is stationery, stock, and sub-contractors (there are other but not IT items). Pretty much unless you sell computers or use subbies then you're an LCT.See You Next TuesdayComment
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Thanks for all the responses on this.
I've checked and you are correct I do fall into the LCT bucket.
That being the case, is the following true:
I invoice £5k + vat of £1k = £6k invoice.
FRS is 16.5% of 6k = £990 giving me a benefit of £10.
If I have VAT reciepts of £100, I can ofset this against the £1000 vat bill meaning I only pay £900 outside of the FRS?
BBCenedl heb iaith, cenedl heb galonComment
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Originally posted by Bluebird View PostThanks for all the responses on this.
I've checked and you are correct I do fall into the LCT bucket.
That being the case, is the following true:
I invoice £5k + vat of £1k = £6k invoice.
FRS is 16.5% of 6k = £990 giving me a benefit of £10.
If I have VAT reciepts of £100, I can ofset this against the £1000 vat bill meaning I only pay £900 outside of the FRS?
BB
Correct - assuming that by VAT receipts, you mean the total amount of VAT on the receipt and not the total amount from the receipt.
In most cases you are better off not using the FRS past year 1 (where you get a discount) when you fall into the limited cost trader category.Last edited by Alchemy Accountancy; 7 January 2019, 16:28.Comment
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Originally posted by Alchemy Accountancy View PostCorrect - assuming that by VAT receipts, you mean the total amount of VAT on the receipt.
In most cases you are better off not using the FRS past year 1 (where you get a discount) when you fall into the limited cost trader category.
Maybe it's time the OP got an accountant?'CUK forum personality of 2011 - Winner - Yes really!!!!Comment
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Originally posted by northernladuk View PostIs there any fixing needs doing to account for the VAT properly before he found out he was LCT?
Maybe it's time the OP got an accountant?
I would also suggest, as other have done, that the OP finds an accountant that works with FreeAgent so that they are compliant with MTD after April this year (an accountant will also be able to prepare the VAT adjustment for HMRC).Comment
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Wow. You’ve been on FRS for 10 years....
LCT has been in place since Apr 2017. I’d suggest you get an accountant. Now. As if your on a decent rate I assume you got a whack to repay?!?Comment
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Originally posted by MrButton View PostWow. You’ve been on FRS for 10 years....
LCT has been in place since Apr 2017. I’d suggest you get an accountant. Now. As if your on a decent rate I assume you got a whack to repay?!?
I'll need to work it out first - but yes there will be a re-payment.
I keep all receipts anyway.
Do I need to advise HMRC I'm leaving the FRS, or just account differently?
BBCenedl heb iaith, cenedl heb galonComment
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