Calc Corporation Tax due on the Flat Rate Vat Scheme

[richy]

Hi,

my ltd is on the flate-rate VAT scheme. Now I am calculating corporation tax.

My understanding is this is simply: gross_income - gross_expenditure. Is that correct?

I'm assuming if I wasn't on Flate Rate scheme, it would all be done with the NET figures totals.

Cheers, rich

[TykeMerc]

You don't pay Corp tax on the VAT element of your turnover if you're not on the FRS.

[Sockpuppet]

Hi,

my ltd is on the flate-rate VAT scheme. Now I am calculating corporation tax.

My understanding is this is simply: gross_income - gross_expenditure. Is that correct?

I'm assuming if I wasn't on Flate Rate scheme, it would all be done with the NET figures totals.

Corp tax is on your profit which can be [money in]-[money out] but can also be a lot harder than that.

Thoughe make sure you account for the change in tax years (i.e. the jump from 20% to 21% accordingly). Also if you have any fixed assets (i.e. comp equipment over £100 (general rule) then depreciate that accordingly).

If you are on FRS you have to add the bit you've saved to your profit and work out the tax on that.

[BolshieBastard]

If you are on FRS you have to add the bit you've saved to your profit and work out the tax on that.

**** me, is that right? What a bastard!

[DaveB]

**** me, is that right? What a bastard!

Yes, why wouldn't it be. It's not a rebate on VAT you get after you have paid calculated profits and paid CT, it is additional potential profit generated as a result of paying less VAT on the FRS. If you don't spend it on some other legitimate business expenditure it becomes part of the co's profits and gets taxed as such. Nothing underhand about it.

[Archangel]

I used Gross Income * 0.87 (i.e. Gross - FRS rate of 13%) for income. (my yearend was in september)

[Gravy Train]

**** me, is that right? What a bastard!

And likewise, you'd get relief if you'd ended up out of pocket

[EchoSierra]

If you are on FRS you have to add the bit you've saved to your profit and work out the tax on that.

Thanks, I was wondering about that bit...

[richy]

You don't pay Corp tax on the VAT element of your turnover if you're not on the FRS.

Ok, thanks for all the replies. I'll calc it on the profit (gross_income - gross_expenditure)

Cheers, rich

[OrangeHopper]

Don't forget that if you are caught by IR35 the FRS on your IR35 income must be distributed as PAYE.