Just to clarify a way of paying VAT to HMRC as a Limited Company.
We do an invoice for the amount of £1000 (exclusive VAT).
Add 20% VAT - £1000 x 20% = £200. £1000 + £200 = £1200 - that is the amount which we charge a client.
So then we have to pay 9% to HMRC for the first year which is £1000 x 9% = £90.
We keep £110 in our pocket, however, there is going to be CT bill to pay later on. Do you make sure you do not spend that £110? 
Uh? You pay your VAT quarterly. That will be 100% of the VAT you have collected, less the VAT you have paid out for expenses and costs. If you can keep the balance in a separate account, it will go some way to settling your corporation tax liability, as long as you take out the full VAT amount of each invoice paid of course.
Janos:
Uh? You pay your VAT quarterly. That will be 100% of the VAT you have collected, less the VAT you have paid out for expenses and costs. If you can keep the balance in a separate account, it will go some way to settling your corporation tax liability, as long as you take out the full VAT amount of each invoice paid of course.
Incorrect he’s talking about the flat rate scheme which is voluntary. 9% is the first year percentage you pay this quaterly not yearly. Yes took the rest away to go towards the corp tax you’ll have to pay
So if you pay 20% vat on all your fuel you can only claim 9% of it back ?
chaversdad:
So if you pay 20% vat on all your fuel you can only claim 9% of it back ?
You’re mixing up two totally different VAT schemes mate. For example an o/d would be VAT registered and would charge 20% VAT for his/her services and claim back 20% VAT on all their vatable purchases, fuel, tyres, servicing etc. whereas a person on the flat rate scheme would charge 20% VAT on their invoices but would not be eligible to claim VAT back on purchases eg fuel, telephone etc.
alix776:
Janos:
Uh? You pay your VAT quarterly. That will be 100% of the VAT you have collected, less the VAT you have paid out for expenses and costs. If you can keep the balance in a separate account, it will go some way to settling your corporation tax liability, as long as you take out the full VAT amount of each invoice paid of course.Incorrect he’s talking about the flat rate scheme which is voluntary. 9% is the first year percentage you pay this quaterly not yearly. Yes took the rest away to go towards the corp tax you’ll have to pay
Had forgotten about the FRS. 
Just to clarify things. It is 9% (10% normally) of the whole turnover of the quarter incl VAT for the FRS as opposed to 20% of turnover less expenses for the standard way. The size of your quarterly expenditure will decide which is most beneficial.
the maoster:
chaversdad:
So if you pay 20% vat on all your fuel you can only claim 9% of it back ?You’re mixing up two totally different VAT schemes mate. For example an o/d would be VAT registered and would charge 20% VAT for his/her services and claim back 20% VAT on all their vatable purchases, fuel, tyres, servicing etc. whereas a person on the flat rate scheme would charge 20% VAT on their invoices but would not be eligible to claim VAT back on purchases eg fuel, telephone etc.
So you would need to be selling and not buying for the flat rate scheme to be beneficial? How many haulage companys dont buy anything? Cant see any incentive to be on it in this game
You wouldn’t get a haulage co using the flat rate scheme. It is aimed primarily for Ltd Co drivers who merely hire out their labour.
Mao is right, it seems to be aimed mainly at contractors, but with fuel costs dropping, and if your other overheads reduce too, it may be worth getting the calculator out and seeing whether you could benefit. The rate at the moment is 10% for hauliers, reduced for new businesses by 1% for the first year. My understanding of it, is that it is 10% of your turnover for the quarter, as opposed to 20% of your turnover less what you can reclaim. So if your truck and trailers are paid for, and you are between deals, and say you are on fairly profitable local work, where you are not using loads of fuel, your overheads may be low enough to make the FRS viable. Not sure if you would see a reduction in any accountancy bills though.
Ahhh got you now , just with the O/p posting in here i thought he had started up as an Owner driver and was using the flat rate scheme , i can definately see the advantage for a self employed driver though
Hi there
The example you have given is a flat rate scheme compare to standard VAT. You are right to say that you charge 20% on your sales invoices and give only 9% (in the first year) to HMRC BUT you charge that 9% on gross amount of £1200 not £1000.
You keep £92 in the first year and £80 in years after that and due to this yes, your turnover for the year will be higher and so higher CT is expected.
However it is only 20% on the £92 or £80 you kept so you are still £73.60 and £64 better of than not being registered at all.
(my mrs is an accountant )