Sage 50 Flat Rate VAT
Flat Rate VAT included in Sage 50 2011
Until now Sage 50 Accounts dealt with Standard VAT accounting and handled 2 default VAT Schemes, Cash Accounting and Invoice based accounting. It could not deal with the Flat Rate VAT scheme; customers who used the Flat Rate scheme had to use various workarounds and manual adjustments.
Using the Flat Rate Scheme you pay VAT as a fixed percentage of your VAT inclusive turnover so the VAT you pay to HM Revenue & Customs (HMRC) or claim back from them is the difference between the VAT you charge your customers and the VAT you pay on your purchases. It applies mainly to small businesses with less than £150K turnover and about 10% of all UK businesses already use this scheme. Flat rate VAT aims to minimize the red tape around administering VAT because you don’t have to record the VAT that you charge on every sale and purchase, as you would with standard VAT accounting. This can mean you spending less time on the books, and more time on your business. Flat Rate VAT also provides a slightly lower rate which varies dependent on the sector the business operates in. There is also a 1% discount for businesses in their 1st year.
New to Sage 50 Accounts 2011 is the ability to deal with Flat Rate VAT scheme and produce the relevant VAT returns and stay compliant with HMRC.
Sage 50 2011 also provides customers with the ability to view the benefits / cost of being on the Flat Rate VAT scheme, giving the customer a choice in making the decision to stay on Flat Rate or not. The customer has the option of setting up Flat Rate VAT either during initial set up or during the financial year.
Benefits to the Customer
- Simple – for customers to setup and use directly within Sage 50 Accounts 2011.
- Easier – no longer do you need to work with a time consuming work around, you can now complete the calculation automatically from within the software.
- Quicker – to complete a VAT return on the Flat Rate VAT scheme and to calculate the savings/loss to your business of being on the scheme.
