VAT FRS benefit... is it tax deductible?

[QwertyBerty]

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.

[expat]

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.

[chris79]

In other words if you want it out your company and in your pocket, then you either pay PAYE/NI on it, or CT depending on the method of extraction.

[QwertyBerty]

Cheers. I'm treating the monies as profit so yeah CT.

QB.

[dude69]

Your sales income on your p+L/CT return is equal to base invoice amount + VAT @ 17.5% MINUS the VAT actually paid over at 12 or 13% of the total.

So yes.

[QwertyBerty]

Your sales income on your p+L/CT return is equal to base invoice amount + VAT @ 17.5% MINUS the VAT actually paid over at 12 or 13% of the total.

So yes.

I was only thinking yesterday whether it ought to be counted as part of Sales income or as Other income...

QB.