VAT FRS Clarification

**northernladuk** · 4 October 2010, 21:56

Depends on what rate you have applied for. It varies for different industries. I seem to remember they have one as low as 9.5% and 10.5%. Depends on which one you picked. I believe I am on the IT consultancy one at 13% but you might do something else and claim a lower figure.

I am sure someone will post the list, I don't have it on this laptop.

One thing I would say though is look in to it pretty quick. It is one thing under paying tax and sorting it out at the end of the year, it is another thing pissing the tax man off. He might be ok with an end of year correction but make sure you know, don't sit on your laurels.

**rsingh** · 4 October 2010, 22:03

Thanks for replying so quickly. I am registered as an IT Consultancy so expect to be paying 13%. Looks like I'll have to get this sorted pretty sharpish...

**rsingh** · 4 October 2010, 22:10

For anybody interested, here are the various rates:

Category of business Appropriate percentage
Accountancy or book-keeping 13
Advertising 10
Agricultural services 10
Any other activity not listed elsewhere 10.5
Architect, civil and structural engineer or surveyor 13
Boarding or care of animals 10.5
Business services that are not listed elsewhere 10.5
Catering services including restaurants and takeaways 11
Computer and IT consultancy or data processing 13
Computer repair services 9.5
Dealing in waste or scrap 9.5
Entertainment or journalism 11
Estate agency or property management services 10.5
Farming or agriculture that is not listed elsewhere 6
Film, radio, television or video production 11.5
Financial services 12
Forestry or fishing 9.5
General building or construction services* 8.5
Hairdressing or other beauty treatment services 11.5
Hiring or renting goods 8.5
Hotel or accommodation 9.5
Investigation or security 10.5
Labour-only building or construction services* 13
Laundry or dry-cleaning services 10.5
Lawyer or legal services 13
Library, archive, museum or other cultural activity 8.5
Management consultancy 12.5
Manufacturing fabricated metal products 9.5
Manufacturing food 8
Manufacturing that is not listed elsewhere 8.5
Manufacturing yarn, textiles or clothing 8
Membership organisation 7
Mining or quarrying 9
Packaging 8
Photography 10
Post offices 4.5
Printing 7.5
Publishing 10
Pubs 6
Real estate activity not listed elsewhere 12.5
Repairing personal or household goods 9
Repairing vehicles 7.5
Retailing food, confectionary, tobacco, newspapers or children's clothing 3.5
Retailing pharmaceuticals, medical goods, cosmetics or toiletries 7
Retailing that is not listed elsewhere 6.5
Retailing vehicles or fuel 6
Secretarial services 11.5
Social work 10
Sport or recreation 7.5
Transport or storage, including couriers, freight, removals and taxis 9
Travel agency 9.5
Veterinary medicine 10
Wholesaling agricultural products 7
Wholesaling food 6.5
Wholesaling that is not listed elsewhere 7.5

Looks like my accountant may think that I my programming skills mean that i should be categorised under secretarial services or film, radio or tv work...

**northernladuk** · 4 October 2010, 22:11

There is of course a 1% discount for first year but you have been round here long enough so presume you are well passed that.

It also dropped in December as VAT went to 15% as well so it's not a straight 13% on total either but am sure you will get it sorted.

**Clippy** · 5 October 2010, 00:39

Originally posted by northernladuk View Post

There is of course a 1% discount for first year but you have been round here long enough so presume you are well passed that.

It also dropped in December as VAT went to 15% as well so it's not a straight 13% on total either but am sure you will get it sorted.

Not necessarily - initially, he may not have been taking enough to reach the VAT threshold.

**Clare@InTouch** · 5 October 2010, 07:50

Originally posted by rsingh View Post

Hi all

I have a VAT question that I need to clarify and I believe that my accountant (due to be replaced) is wrong.

I work through my own ltd company and am VAT registered under the Flat Rate Scheme. It is my understanding that I bill my clients 17.5% and then give HMRC 13% of the gross invoice. This is what I have read on CUK and on the HMRC website.

I double checked my accountants figures for my latest VAT return, and thought that it was a bit low. Upon doing the calculation myself, I queried it with my accountant. They said that I only need to pay 11% of my gross invoice.

Before I get back to my accountant who I pay £stupid per month, I would like to know, am I being a numpty? I am about to get a new accountant and want to know my exact position and therefore will get them to recheck my books for my whole trading history. What happens if I find I have been underpaying VAT? As a director, I am legally responsible for my returns. Do I have any recourse if my current accountant has made mistakes on my VAT returns?

Is it possible they are using the old flat rates? 11% would have been correct when VAT was 15% but it should then have gone up on 01 January 2010.

**Fred Bloggs** · 5 October 2010, 08:22

Originally posted by *Clare* View Post

Is it possible they are using the old flat rates? 11% would have been correct when VAT was 15% but it should then have gone up on 01 January 2010.

Sort of interestingly, that is exactly the mistake my accountants made earlier this year. Luckily, I work out my own VAT and I use this to check the accountants figures. They were wrong for my first VAT payment in 2010.

**Vallah** · 5 October 2010, 08:27

Originally posted by rsingh View Post

Hi all

I have a VAT question that I need to clarify and I believe that my accountant (due to be replaced) is wrong.

I work through my own ltd company and am VAT registered under the Flat Rate Scheme. It is my understanding that I bill my clients 17.5% and then give HMRC 13% of the gross invoice. This is what I have read on CUK and on the HMRC website.

I double checked my accountants figures for my latest VAT return, and thought that it was a bit low. Upon doing the calculation myself, I queried it with my accountant. They said that I only need to pay 11% of my gross invoice.

Before I get back to my accountant who I pay £stupid per month, I would like to know, am I being a numpty? I am about to get a new accountant and want to know my exact position and therefore will get them to recheck my books for my whole trading history. What happens if I find I have been underpaying VAT? As a director, I am legally responsible for my returns. Do I have any recourse if my current accountant has made mistakes on my VAT returns?

As a director you're legally responsible for your VAT, but if your accountants have made a mistake I'd be on to them for any penalties. Depending on how long you've been flat rate registered for though and how much you invoice a year, an error of 2% might not make that much difference. I can't remember what the figure is, but errors of £2K worth of VAT never had to be reported to HMRC, just adjusted on your next VAT return.

**Clare@InTouch** · 5 October 2010, 09:20

Originally posted by Vallah View Post

As a director you're legally responsible for your VAT, but if your accountants have made a mistake I'd be on to them for any penalties. Depending on how long you've been flat rate registered for though and how much you invoice a year, an error of 2% might not make that much difference. I can't remember what the figure is, but errors of £2K worth of VAT never had to be reported to HMRC, just adjusted on your next VAT return.

That's up to £10,000 now.

HM Revenue & Customs

VAT FRS Clarification