VAT Flat Rate Scheme: Filling Out Your VAT Return

If you operate under the VAT Flat Rate Scheme you must fill out the same VAT return as everyone else, as there is only one type of VAT return in use.  HMRC sets out rules as to how you should complete the boxes on your VAT return when you operate under the Flat Rate Scheme and which numbers you should use.

Find Out Your Flat Rate Percentage

HMRC sets out the flat rate percentage you should use, depending on the industry you operate in.  You will find this within your Flat Rate Registration Application or you can look it up here.  If you are newly VAT registered then you may be entitled to the 1% discount.

If you are new to VAT or are unsure whether you are entitled to the 1% discount then read my blog ‘VAT Flat Rate Scheme: How Does it Work?‘ as this will give you an overview of how the scheme works and it’s benefits.

Filling Out Your Flat Rate VAT Return

If you are on cash accounting, when filling out your Flat Rate VAT Return you should include figures based on when you were paid.  However if you are on invoice accounting, your numbers should be based on the date that you invoice your customer.

Let’s work through box by box what you need to include and how to work out the numbers you need:

Box 1 VAT Due on Sales and Other Outputs

Enter the amount of VAT you need to pay to HMRC.  Work this figure out by multiplying your sales including VAT by your Flat Rate Percentage.

Example: if you have invoiced your customers £10,000 including VAT and your flat rate percentage is 14.5%, then you would include £1,450.00

Box 2 VAT Due on in this Period on Acquisitions from other EC Member States

If you have not bought any goods from EC member states then enter 0.00 into this box.  If you have purchased goods (not services) from EC member states, then head over to this separate blog Filling Out Your VAT Return: Box 2 EC Acquisitions to find out how to handle these types of purchases.

Box 3 Total VAT Due

This is worked out automatically for you but is the total of box 1 and box 2 added together.

Box 4 VAT reclaimed on Purchases and other inputs (including EC acquisitions)

When you are on the flat rate scheme you do not claim back VAT on your purchases so you would generally need to enter 0.00 unless:

Box 5 Net VAT to be Paid or Reclaimed

This is also automatically worked out but it is the difference between Box 3 and Box 4.

Box 6 Total Value of Sales

Enter into Box 6 the total amount of income that you used to work out your flat rate percentage including VAT. This is the figure that was invoiced/collected from your customers including VAT at the standard rate of 20% not your flat rate percentage.

Box 7 Total Value of Purchases

When you are on the flat rate scheme you do not claim back VAT on your purchases so you would generally need to enter 0.00 unless:

Box 8 Total Value of Supplies of Goods excluding VAT to other EC Member States

You will need to complete this with 0.00 unless you have supplied goods to other EC member states. In this case you would need to enter the total cost of the goods you have supplied, excluding VAT into this box.

Remember this box relates to just goods and not services.  It may also result in a request for you to complete an EC Sales List, breaking down details of the amounts and which countries your have supplied.

Figures entered in this box must also be included in your box 6 total as well.

If you have not bought goods from VAT registered business in EC member states enter 0.00 into this box.

However if you have bought these goods then you will need to enter the net amount of these purchases – find out more details on how you enter these type of purchases in this separate blog Filling Out Your VAT Return: Box 2 EC Acquisitions.

Figures entered in this box must also be included in your box 7 total as well.

Anita is a Chartered Accountant, turned blogger and creator of the ever popular free Go Self Employed Email Mini Course, which has been completed by hundreds of attendees all over the UK. Using her 10 years experience in accounting, tax and operations for Small Businesses, Anita is on a mission to make finance simple for the self employed, so they can stop stressing about tax & finances and focus on building profitable businesses which will give them the lifestyle they dream of.