In the Flat Rate scheme, how do I record the VAT reclaimable on purchases above £2000?

If you use the Flat Rate scheme for calculating VAT for your organisation, you can reclaim the VAT for purchases above £2000 inclusive of VAT.

You can reclaim the VAT only for the purchase of Fixed Assets . You can either choose Furniture and Equipment or create a new Fixed Asset account.

To reclaim the VAT:

• Create an expense and for the Expense Account, select for example, Furniture and Equipment under Fixed Assets.
• In the Amount field, enter an amount greater that £2000 inclusive of VAT.
• Fill in the other additional fields, if required.
• Click Save.

This expense can reclaimed from the HMRC when filing your return.