1. Welcome to UKBF! Check out our FAQ guide.

Flat rate vat - paying too much?

Discussion in 'General Business Forum' started by mm60103, Feb 5, 2011.

  1. mm60103

    mm60103 UKBF Newcomer Free Member

    Posts: 6 Likes: 1
    My small limited company has been flat VAT registered for about 7 years. I work as an electrical engineer designing and specifying equipment. I think I've been over paying on the flat rate vat. Last year I was paying 12% and I find out now many of the ex umbrella type companies now operating as accountants were recommending 10.5%. The VAT has now changed and its looks as though I need to go from 13% to 14.5% whereas the others seem to be lifting from 10.5% to 12%.

    Because I've been operating like this for a few years now am I stuffed with the higher rate.

    My next VAT return is due is it worth just dropping both figures.

    The HM site goes on about architects and civil engineers - these attract the higher rate whereas other engineers surely should attract the lesser figure.

    Any thoughts.
  2. Scalloway

    Scalloway UKBF Contributor Free Member

    Posts: 5,858 Likes: 1,435
    Have you listed all your sales and input VAT to see if you are better off on the fixed rate? That would be my first step.
  3. mm60103

    mm60103 UKBF Newcomer Free Member

    Posts: 6 Likes: 1
    I'm definately better off on the flat rate scheme. My company doesn't make purchases or scarce few and its essentially a service type contract.

    My issue is that the description on the VAT site is vague. I think I've been overpaying. Would you just change the flat rate or would you get in touch with the VAT man. If I speak with the VAT man he will give me an answer which I believe will fall in his favour. Without asking him I am genuinely working in ignorance.

    If I simply changed the rate and made myself a decent saving how often does the vat man check things and is he likely to come looking. VAT will be paid its just the amount of VAT in question.
  4. Scalloway

    Scalloway UKBF Contributor Free Member

    Posts: 5,858 Likes: 1,435
    The VAT office may well do a check on your figures when they receive the return. Any discrepancy will trigger a VAT inspection.
  5. Bob

    Bob UKBF Contributor Free Member

    Posts: 1,918 Likes: 483
  6. eggtastico

    eggtastico UKBF Newcomer Free Member

    Posts: 8 Likes: 1
    xxx.hmrc.gov.uk/vat/start/schemes/flat-rate.htm#5

    hope that is of some help. - i cant post links yet, I dont have enough posts