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A builder uses the labour-only rate in the flat rate scheme. In October 2013, he invoiced a client £10,000 for zero-rated work on new houses and was paid in November 2013
My builder client uses the labour only rate in the flat rate scheme. I am about to complete his November 2013 VAT return and have identified that on 31 October he invoiced a client £10 000 for zero-rated work on new houses. The invoice was paid by the customer on 30 November.
The client will need to withdraw from the flat rate scheme because of this zero-rated supply which would result in a tax bill where no VAT was charged to his client.
My question is whether he would need to withdraw for the entire period from 1 September to 30 November 2013 or whether he can enjoy the benefits of the scheme until 31 October when the invoice was raised or possibly until 30 November?
The client uses the cash-based turnover method ie he only declares flat rate scheme tax when his...
