How the Flat Rate Scheme for VAT works in Xero

[@jalfrezigrazy]

This video really helped me setup my VAT scheme in Xero. Really useful and clear. Thanks 😊

[@XUSolutions]

You’re welcome

[@gusmeliabarreto9170]

Thank you so much for the explanation step-by-step. this video really helpful a lot.

[@philippearson2768]

Very helpful, thank you. I didn't realise the Flat Rate %'s applied to the gross figure not the net.

[@XUSolutions]

You’re not the only one - it’s a common mistake.

[@nicolatennant9901]

Thank you Marion, this was really helpful for me today.

[@XUSolutions]

Always happy to help

[@stephenhenry7600]

This was really helpful thank you. We have some tax exempt sales which are set up as tax empt in Xero but for some reason are being included in the flat rate calculation. It would be great if you could cover this in a video as well please. Thanks.

[@stanleyspencer9582]

Thank you for this video, very helpful. One question I have is do I need to do anything to confirm the date the changes become effective? For example, when I make the changes in the accounting settings, does that become effective on that day or for the current VAT quarter (not yet complete) or the next VAT quarter? Do I need to 'lock' any dates to prevent the changes becoming retroactive? Thank you!🙂

[@AdrianNelson1507]

How should I be claiming my cap ex VAT if paying for something monthly? 🤔 Thank you for your videos 😊

[@prakashjha5973]

Thanks for explaining

[@ibkis30]

Very helpful thank you!

[@abedinmd.zahirul5396]

Hi, thank you for the useful video. Could you please let me know, how to change Flat rate VAT rates in Xero after 1st year 1% discounted rate.

[@lindsayjohnstone405]

Really helpful, i'm loving your videos'. Great at explaining on simple terms for me whos just learning! For the large expenses over £2000 does this need to be a physical item or can it be a service purchased, i.e. accreditation fees?

[@beaacworth4328]

hi! thanks for your video, its super helpful. I use Xero and am on the flat rate scheme, do zero-rated sales (which for me is my non-UK sales) automatically get included in your VAT taxable turnover figure on xero? I know that zero-rated sales should be included in this figure but just want to confirm that Xero automatically does this :) thanks

[@stevebarnes9536]

Great video, thank you. Does Xero calculate whether you are a limited cost business? I understand that if your cost of relevant goods is less than 2% of turnover, you have to apply the percentage at 16.5% or do you have to calculate this manually before choosing the flat rate percentage? Also, how does Xero differentiate between relevant goods and non relevant goods? Thank you

[@XUSolutions]

No, Xero doesn’t do these calculations for you

[@shahabuddinahmad8792]

valuable❤❤❤❤ thnx mam for such a beautiful explaination

[@XUSolutions]

You’re welcome

[@helenw2001]

Thank you, very clear. Do you get a reminder of when you need to adjust for the 1% after 12 months? We have just started a Ltd company and can't quite decide whether we should be VAT registered or not? Do you have any videos as to how to decide when to register? I am thinking that if selling more to VAT registered companies then it makes more sense to be VAT registered. If it is more to individuals not being VAT registered helps to be price competitive. Obviously, this is if the VAT threshold is not met. Thanks again, have watched several of your videos now, and all brilliant.

[@XUSolutions]

Hi, unfortunately there’s no reminder after the 12 month period. As for deciding about VAT registration, what you are thinking makes sense. There are a few good blogs on the internet covering this subject. If you can’t find any send me an email and I will find some for you. It’s [e-mail]

[@asimaslam001]

Thanks. When does flat rate adjustement show on P&L? after submitting the vat return?

[@XUSolutions]

Yes at submission

[@Somerougekid]

Great video.

[@XUSolutions]

😊

[@264ria]

Hi! Does the Flat Rate Scheme Adjustment in the P&L get created once you finalise the vat return or on each and every sales invoice posted please?

[@XUSolutions]

It gets posted automatically in Xero when you file the VAT return. It’s only a 2 line entry - to the VAT account and the FRS Adjustment account.

[@snapperpaul3]

Just what I needed - but what is the difference between flat rate accrual and flat rate cash

[@XUSolutions]

Accrual is based on invoice date, cash is based on payment date

[@katiejackson9450]

Is this right that in the year end accounts the net profit is higher and we have to pay more corporation tax?

[@XUSolutions]

It’s a point that doesn’t get mentioned a lot, but any gain from the Flat Rate Scheme is taxable.

[@guyallanson7239]

Great work Thanks

[@XUSolutions]

😊

[@buddiesblogzz8405]

Thank you

[@XUSolutions]

You're welcome

[@tanvirahmadsiddiqui7381]

Can i get YOUR email??