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VAT Flat Rate Scheme

VT Transaction does not have any special features for the VAT flat rate scheme. We recommend the following procedures when operating the flat rate scheme:

• Enter sales and purchases gross of VAT. In other words, do not enter any VAT in the VAT boxes in the input screens

• When the VAT return is due, temporarily set the accounting period to the VAT quarter. To do this, choose the Accounting Period command from the Set Up menu. If the VAT quarter straddles the year-end, this must be done before the year-end transfer

• Choose the Draft Profit and Loss Account command from the Query menu

• Multiply the quarterly sales shown in the above report by the flat rate percentage to arrive at the amount of VAT due. For the exact definition of sales, see 'How do I work out my flat rate turnover' in VAT notice 733

• Enter the amount of VAT due in box 1 of your VAT return and the sales in box 6

• When you pay the VAT return, analyse the cheque to a new account in the Expenses ledger called Flat rate VAT. When you enter the cheque, enter the date in VT Transaction as the last day of the VAT quarter, not the actual date of the cheque

The above procedures apply in straight forward circumstances and do not cover the recovery of VAT on capital assets. For the full provisions of the flat rate scheme, see VAT notice 733