Solar Accounts - flat rate scheme for VAT

Haggis Registered Posts: 40 Regular contributor ⭐
I wonder if anyone uses Solar accounts and applies the flat rate % calculation offered ?
I understand how Solar accounts treats the VAT showing net values for purchases and creates a running gain/loss account. However if I am correct the HMRC indicate that expenses should be accounted for including VAT. It would seem that the P&L in Solar shows net expenses and the only workaround would be to input expenses at 0% VAT.
Has anyone else encountered this problem and if so how did they tackle it ?


  • Monsoon
    Monsoon Registered Posts: 4,071 Beyond epic contributor 🧙‍♂️
    I don't think it matters how you account for the expenses. You can record expenses gross, because the whole point of flat rate is that it's supposed to be simpler. I don't think it says you have to record it gross. I could be wrong though!

    I always include the VAT breakdown on expenses so I can see if the FRS is profitable or not- otherwise how can you know whether you're on the right scheme or not?
  • Haggis
    Haggis Registered Posts: 40 Regular contributor ⭐
    Thanks for this, still feel a bit dodgy with VAT and the FRS but I am going to go with the way Solar calculates the gain/loss and as I work through I'm sure things will get clearer.
    Here's hoping !
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