Is it possible not to use the VAT flat rate scheme if this is disadvantageous?
Despite encouragement a builder client does not keep proper records. When preparing the accounts I realised that the VAT threshold had been exceeded in April 2014. I registered the business for VAT from 1 June 2014 but because there were no purchase receipts I applied to use the flat rate scheme (FRS) at 9.5%. I have just received the client’s VAT number so I am ready to file the returns online and bring them up to date. I calculate that about £15 000 is owed and possibly penalties in excess of £2 000.
The problem is that the client carried out building work on a new house in the late registration period earning about £80 000. If they were on the normal VAT scheme this would mean that there was no output VAT to pay and input tax could be claimed on the...
Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.