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Flat Rate Scheme and Outside the Scope services

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Published: 06 Feb 2023

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Q: My client is on FRS and they are supplying general rule services to UK business customers but also to EU and ROW business customers so some are outside the scope (OTS) supplies. Should these be included in the turnover figure when working out their VAT due using their FRS %? Should these OTS supplies be included at Box 6 of their VAT Return? Also when checking at the anniversary to see if they are still eligible to use the scheme, should these OTS amounts included in the turnover figure then?

A: Do not include OTS sales in flat rate turnover when applying your Flat Rate Percentage to work out the VAT due - see Notice 733 6.3.

Include these supplies in Box 6 of your VAT return – see Notice 700/12 3.7.

Total income for checking whether still eligible to use the scheme should include your OTS supplies - see Notice 733 12.2 (a).

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