Flat Rate VAT Return Example


Here is a Flat Rate VAT Return Example to show you how it all works, including registering, invoicing and filling out a flat rate VAT return.

Flat Rate VAT Return Example

Jo is a self-employed bookkeeper earning £100,000 per year so must register for VAT. 

Jo is considering joining the VAT Flat Rate Scheme. Here’s what she needs to do:

Check the VAT Flat Rate Scheme is Beneficial

The VAT Rate Scheme can help self-employed individuals by:

  • Simplifying VAT workings and record keeping;
  • Resulting in a ‘profit’ from using a lower VAT percentage.

Jo must check how much purchase VAT she will pay otherwise the VAT Flat Rate Scheme can turn out to be costly.

Once happy, Jo can register online for the VAT Flat Rate Scheme.

Once Jo has registered, every invoice raised must still show VAT at 20% on them, not her flat rate scheme percentage of 14.5%.

So if Jo raises an invoice £2,500, the invoice total would be £3,000 (£2,500 plus VAT).

Filling out the Flat Rate VAT Return

In our flat rate VAT return example, let’s assume that during the quarter Jo had:

  • Invoiced £25,000 plus 20% VAT;
  • Bought a computer for £1,800 plus 20% VAT.

The Flat Rate VAT return in this example will look like this:

Box 1 (£25,000 x 14.5%)£3,625.00
Box 2£0.00
Box 3£3,625.00
Box 4 (£1800 x 20%)£360.00
Box 5£3,265.00
Box 7 (25,000 x 20%)£30,000
Box 8£1,800
Box 9£0

Jo can only claim back the VAT on her new computer but no other expenses. This is it meets the rules of Capital Assets over £2,000.

Learn more about what to include in each of the Boxes on a Flat Rate VAT Return.