Flat Rate Scheme Purchases

If you’re using the Flat Rate Scheme (FRS) for VAT then you can’t reclaim VAT on purchases.

The exception is if the purchase is more than £2,000 and is for Capital Expenditure (eg. a computer). In these cases you can reclaim the VAT.

KashFlow can handle this for you. Just enter the purchase in the usual way via the Purchases tab and ensure the Purchase Code is set to a Fixed Asset code. It’ll then be dealt with for you on your next VAT return.

To check if a Purchase Code is set as a Fixed Asset, go to Settings -> Chart of Accounts.

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