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Is the monies earned from being on VAT FRS scheme tax deductible? I'm assuming it isn't but wanted to double check.
Thanks,
QB.
The answer only makes sense if I am pedantic, so please excuse me.
No money is earned from being on VAT FRS. It is true that your Co hands over a little less in VAT to HMRC than it would otherwise. The difference is not a separately identifiable sum of money, it just means that your Co's income is a little higher.
What happens to this little extra income is the same as happens to the rest of your Co's income: if your Co pays you a higher salary by the amount that it saved on VAT, that will of course be liable to PAYE and NICs. If it retains it as a profit, it will be liable to CT. Etc.
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