Calculating VAT on weekly / monthly / 1/4ly takings?
steve2008
Registered Posts: 89 Epic contributor 🐘
Sorry if there is a better forum for this question, I'm studying lvl 2 at the moment but this question doesn't relate to those topics.
The business I work for currently (a takeaway) is registered for flat rate VAT (11.5% at the moment).
Our accountant calculated the VAT return based on the full takings for the whole quarter, whereas I calculated it on a weekly basis, inevitably there was a small difference (2 pence).
This lead me to question what is acceptable practice in this regard.
If it was calculated on the daily figures it would have been around 30p less than the accountant calculated, I can only imagine how much less it would be if the VAT was calculated on each customer.
Are all those methods acceptable?
The business I work for currently (a takeaway) is registered for flat rate VAT (11.5% at the moment).
Our accountant calculated the VAT return based on the full takings for the whole quarter, whereas I calculated it on a weekly basis, inevitably there was a small difference (2 pence).
This lead me to question what is acceptable practice in this regard.
If it was calculated on the daily figures it would have been around 30p less than the accountant calculated, I can only imagine how much less it would be if the VAT was calculated on each customer.
Are all those methods acceptable?
0
Comments
-
Since it's a quarterly return I would calculate it on a quarterly basis.
Take the VAT-inclusive (gross) turnover for the quarter, multiply it by 0.115 and viola your Box 1 figure. Flat rate is an easy return I wouldn't complicate it any more.
Accountancy software would do the same.0 -
Thanks.
I was just wondering about the potential of saving money. Seems odd that we calculate it in such a way that the tax man gets the most possible.0 -
HMRC requirements and all, they want you to calculate the VAT returns as a category specified percentage of your turnover for the given VAT return quarter. So, I'm guessing it would flag up on HMRC's system that you aren't calculating it based on the quarterly total, thus submitting illegitimate amounts.
There are VAT schemes that have different methods of calculation but the requirements are stricter I think. Not sure what type of flat rate your company are on (sounds like cash based?), but take a look at HMRC for more ideas:
http://www.hmrc.gov.uk/vat/managing/returns-accounts/flat-rate-returns.htm
http://www.hmrc.gov.uk/vat/start/schemes/retail.htm
I must say their website is an invaluable wealth of information!0 -
Since it's a quarterly return I would calculate it on a quarterly basis.0
Categories
- All Categories
- 1.2K Books to buy and sell
- 2.3K General discussion
- 12.5K For AAT students
- 325 NEW! Qualifications 2022
- 160 General Qualifications 2022 discussion
- 11 AAT Level 2 Certificate in Accounting
- 56 AAT Level 3 Diploma in Accounting
- 95 AAT Level 4 Diploma in Professional Accounting
- 8.8K For accounting professionals
- 23 coronavirus (Covid-19)
- 273 VAT
- 92 Software
- 274 Tax
- 138 Bookkeeping
- 7.2K General accounting discussion
- 202 AAT member discussion
- 3.8K For everyone
- 38 AAT news and announcements
- 345 Feedback for AAT
- 2.8K Chat and off-topic discussion
- 582 Job postings
- 16 Who can benefit from AAT?
- 36 Where can AAT take me?
- 42 Getting started with AAT
- 26 Finding an AAT training provider
- 48 Distance learning and other ways to study AAT
- 25 Apprenticeships
- 66 AAT membership