For many freelancers, contractors and business owners, dealing with VAT returns can be an unwanted burden. If you feel the same, Flow can help ease your burden with FreeAgent’s VAT management capabilities.
FreeAgent cloud accounting software has simplified what has traditionally been a complicated process. Quite simply, it keeps track of how much you owe and when you need to pay it. Plus, the innovative system will automatically generate VAT returns for you and file them directly to HMRC, allowing you to get on with more important things.
Among other features, FreeAgent’s time-saving software has the following capabilities:
- Fully supports EC Goods and Services regulations.
- Handles reverse charges.
- Comprehensive compatibility with flat rate scheme, including the automatic claim of 1% discount.
- Can switch between cash-based returns and invoices.
- Manages VAT deregistration.
- Communicates flawlessly with HMRC’s website.
At Flow, our team of friendly cloud accounting experts can help you get to grips with FreeAgent’s VAT features. Interested in knowing more? Here are some of the ways that FreeAgent can change the way you do business:
HMRC has imposed a number of conditions on goods and services that are bought or sold outside of the UK, but within the EU. Keeping abreast of the alterations to the legislation (some of which is as recent as January 2015) can be a complicated process.
With FreeAgent, you can equip all of your invoices, quotes and reports with EU VAT capability, simply through checking a few boxes. When setting up an invoice or report for goods or services (whether bought or sold), all you need to do is:
- Enable EC VAT reporting through the “Settings”button.
- List your contact as EC VAT by editing their details.
- Tag the transaction accordingly.
- Choose the correct rate of VAT to be applied to the transaction.
- And create!
This might sound easy in theory, but if you have any problems in practice, Flow’s experienced cloud accountants are here to help.
Flat Rate Scheme
VAT FRS (flat rate scheme) is a method of calculating the amount of VAT owed to HMRC. Instead of deducting the amount of VAT you have charged customers from the total amount you are entitled to reclaim on an ongoing basis, HMRC lets small business owners and sole traders pay a flat rate of VAT on all of their sales.
The flat rate scheme is a good choice if you want to simplify your accounts and dispense with the laborious business of calculating VAT liability on a day-to-day basis. VAT FRS is fully compatible with FreeAgent’s VAT software, making it as simple as possible to automatically generate VAT returns and file them directly to HMRC.
From time to time, it might be necessary to create invoices that only contain VAT totals. FreeAgent comes fully equipped with the ability to produce VAT-only invoices, simply by specifying “VAT”in the item type on your invoice template.
Quick Tip: HMRC does not recommend sending VAT-only invoices while you are still in the process of registering for a VAT number. Your customer might not technically be obliged to pay the VAT. However, once the invoice is created, you will be.
Trimming the VAT with Flow
If you’re not sure where to start or don’t have the time, don’t worry. At Flow, we understand that staying on top of all of the latest ins and outs of VAT regulations can be a tall order. Fortunately, our team of experienced cloud accounting experts at Flow are old hands when it comes to the complexities of HMRC’s rules. Whether you need assistance with VAT returns, creating VAT-only invoices or deciding whether to register for HMRC’s flat rate scheme or not, we can help.