Guide to completing a UK VAT return for businesses using the flat rate scheme

Produced by Tolley
Guide to completing a UK VAT return for businesses using the flat rate scheme

The following Value Added Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Guide to completing a UK VAT return for businesses using the flat rate scheme
  • Background to the flat rate scheme
  • How to fill in a VAT return for the flat rate scheme
  • Box 1: VAT due on sales and other outputs
  • Box 2: VAT due (but not paid) on acquisitions in Northern Ireland from EU member states
  • Box 3: total VAT due
  • Box 4: VAT reclaimable on purchases
  • Box 5: VAT payable or reclaimable
  • Box 6: flat rate turnover for the period
  • How to calculate the flat rate turnover
  • More...

Guide to completing a UK VAT return for businesses using the flat rate scheme

Background to the flat rate scheme

The flat rate scheme is designed to help small businesses by making it easier to record taxable sales and purchases. Businesses using the scheme normally apply a single percentage to their total flat rate turnover in a VAT period and the result is the VAT payable to HMRC. For more information, see the Overview of the VAT flat rate scheme for small businesses guidance note. Please see the Submitting online VAT returns guidance note for more information on submitting the return.

This guidance note has been updated to reflect the end of the Brexit transition period (at 11pm on 31 December 2021). For VAT returns due before 1 January 2021, the references to Northern Ireland below should be amended to be references to the UK.

How to fill in a VAT return for the flat rate scheme

Filling in the return for the scheme is different from filling in a return using standard accounting, although some boxes are the same.

All of the boxes on the return must be completed. Do not leave any box blank.

If the business needs to include negative amounts and ‘not applicable’ boxes then for online returns:

  1. put a minus sign before the figure for negative amounts

  2. enter ‘0.00’ for ‘none’ or ‘not applicable’

Box 1: VAT due on sales and other outputs

Businesses using the flat rate scheme do not need to account for the VAT shown on every invoice issued. Instead, the business works out the flat rate turnover for the period covered by the VAT return (see information for box 6 below for details on the flat rate turnover).

When the VAT turnover for the period has been calculated, the flat rate scheme percentage needs to be applied to the VAT turnover figure. For example, if the VAT inclusive flat rate turnover for the period is £10,000 and the percentage is 10% then the calculation

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