Re: Flat rate scheme
On VAT Notice 733.
7.8 How do I prepare business accounts for Income Tax purposes while I am using the Flat Rate Scheme?
It is expected that accounts for businesses who are using the scheme will be prepared using gross receipts, less the flat rate VAT percentage, for turnover and that expenses will include the irrecoverable input VAT.
For both VAT and Income Tax purposes, there is a requirement to keep a record of sales and purchases. But, for businesses using the scheme, that record does not have to analyse gross, VAT and net separately. The records need only be complete, orderly and easy to follow.