UK VAT or NON-VAT

[bigdaz28]

Hi,

Im just doing my books on Pandle software ready for the self assessment and i have noticed when i run a trial profit and loss report that in some categories and items its not taking the VAT i paid into consideration. ie "work clothing" £80. when i actually paid £100.

Now im only registered for flat rate VAT so i cant claim that VAT back. surely the £20 VAT portion should be taken into account when working out the net profit that i will be paying income tax on in the end. obviously there is an option for me to have the full £100 show in the P and R report but just want to make sure first as this could be the difference of a few thousand quid that i might have to pay tax on

Hope this makes sense as i am a total layman when it comes to accounts

 

[Fidget]

With the flat-rate VAT scheme, you should show your expenses at the amount you paid ie £100 since you can't reclaim VAT. There's an article about it from HMRC here:

https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim31585