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Cash Accounting and Flat Rate Scheme
Cash Accounting
Some businesses use a VAT scheme called "Cash Accounting". This allows you to only pay/reclaim VAT on payments actually made/received - as opposed to invoices issued. This is usually very useful for small businesses.
Some businesses use a VAT scheme called "Cash Accounting". This allows you to only pay/reclaim VAT on payments actually made/received - as opposed to invoices issued. This is usually very useful for small businesses.
Flat Rate Scheme (FRS)
The Flat Rate Scheme lets you pay VAT to HMRC as a set percentage of your turnover, lower than you would normally pay. However, you can't reclaim VAT on any of your purchases. The exact percentage depends on the industry you are in. If you think you may benefit from this scheme you should talk to your accountant.
The Flat Rate Scheme lets you pay VAT to HMRC as a set percentage of your turnover, lower than you would normally pay. However, you can't reclaim VAT on any of your purchases. The exact percentage depends on the industry you are in. If you think you may benefit from this scheme you should talk to your accountant.
To choose whether you wish your VAT to be calculated by the CAS or FRS simply go to the REPORTS tab, select VAT report and select VAT SETTINGS (vat settings will appear automatically if it is the first time you have accessed this page).
If you wish for the VAT to be shown on your overview page, simply tick the ‘no more nasty surprises’ box (note: this will cause the overview page to load a little slower).
Select update once you are finished.