Flat Rate Parameters

This screen allows for the setting of flat rates for defined date ranges. Date ranges should never overlap. There should not normally be a gap between date ranges unless you have left and returned to the flat rate scheme in which case the gap should normally be at least one year.

If you start on the flat rate scheme within one year of registering for VAT you may be entitled to a discounted flat rate (normally 1% less) until the day before the first anniversary of your registration.

If your business changes and you move to a different flat rate classification simply set up different rates for the appropriate date ranges.

HMRC changes to the rates are handled by setting up rates and validity dates as required.

Flat Rate VAT Start Date

Enter the date from which you may start to use the HMRC Flat Rate VAT scheme.

It is very important that this date is entered correctly; it is used in conjuction with the VAT registration date field to decide whether the discounted flat rate or full flat rate should apply to a given transaction.

When the value in this field is changed, flat rate adjustment postings may be applied to, or removed from, existing transactions which have not been included in a VAT return.

Flat Rate VAT End Date

Enter the date from which you will cease to use the HMRC Flat Rate VAT scheme. This date is provided by HMRC when you apply to leave the scheme.

It is very important that this date is entered correctly.

When the value in this field is changed, flat rate adjustment postings may be applied to, or removed from, existing sales transactions which have not been included in a VAT return.

When the value in this field is changed, it is the user's responsibility to update VAT codes and amounts on any existing purchase transactions impacted by the date change. e.g. a purchase transaction for 1/6/2007 has been recorded as a flat rate purchase with the VAT rate "Out of Scope". If a flat rate end date of 31/5/2007 is entered, the above transaction should not be a flat rate "Out of Scope" transaction and the transaction must be updated by the user.

Flat Rate VAT Rate

Enter the standard flat rate percentage that you will be using on the HMRC Flat Rate VAT scheme. i.e. enter 12 if the rate applicable to your business is 12%.

It is very important that this value is entered correctly as it is used to calculate flat rate adjustments to your VAT liability for every Invoice and Credit Note you issue.

When the value in this field is changed, flat rate adjustment postings may be updated for existing transactions which have not been included in a VAT return.

Discounted Flat Rate VAT Rate

Enter the discounted flat rate percentage that applies during the 1st year after your VAT registration date. The discounted rate is normally 1% less than the standard rate. i.e. enter 11 if the discounted rate applicable to your business is 11%.

It is very important that this value is entered correctly as it is used to calculate flat rate adjustments to your VAT liability for every Invoice and Credit Note that you issue.

When the value in this field is changed, flat rate adjustment postings may be updated for existing transactions which have not been included in a VAT return.


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