As with any VAT scheme, you must keep records and details of all returns you have submitted and your workings. When it comes to the VAT Flat Rate Scheme there are some additional pieces of information you should make sure you keep too.
VAT Flat Rate Scheme Record Keeping
Keeping organised is the key to making your VAT easier and staying on the right side of HMRC. Here are records you must make sure you are keeping when you operate under the VAT Flat Rate Scheme:
- the flat rate percentage you have used each quarter;
- breakdown of how you calculated the amount of VAT due or repayable;
- breakdown of your flat rate turnover used for calculating each VAT return;
- any amounts you have spent on capital asset purchases if you wish to claim back VAT;
- Copies of VAT invoices you have sent to your customers/clients detailing VAT charged at the standard rate;
- Bank statements.
Making Tax Digital is confirmed for VAT registered businesses from April 2019, so if you are not yet using a cloud based software then I recommend getting set up on one. Not only is it going to become a legal requirement but it will make your VAT calculations much easier. If you are struggling to keep your paperwork in order, then take a read of this blog Tips to Help you Keep Your Accounting Records Organised to learn what you need to keep and a recommended process for keeping everything organised.