VAT & tax in the forecast
How VAT, corporation tax, duty and NIC flow through a bluprnts forecast — what hits profit, what only moves cash, and when each falls due.
Tax is where profit and cash come apart most visibly. bluprnts models four kinds, and they behave differently — some reduce profit, some only move cash, and all of them land on their own schedule rather than when they're incurred.
What each one does#
| Tax | Hits profit? | Moves cash |
|---|---|---|
| VAT | No — you collect and reclaim it on someone else's behalf | On your VAT payment schedule |
| Corporation tax | Yes | Months after the year end, on your setting |
| Duty | Yes, as a cost of sale | On its payment schedule |
| Employer's NIC | Yes, as part of payroll | With payroll |
VAT is the one that surprises people. It never touches your profit and loss, but it can dominate a quarter's cash: you collect it on every sale, hold it, and hand it over in a lump. A quarter that looks profitable can be the quarter you can least afford.
VAT#
Charged on sales, reclaimed on purchases, remitted on your schedule. Two treatments:
- Standard — VAT falls due on the invoice date, paid or not.
- Cash accounting — VAT falls due only when the money has moved, which helps if your customers are slow.
Between remittances, VAT sits on the balance sheet as VAT payable or VAT receivable. Whether a particular product or cost carries VAT is set on the item; the scheme is set once for the company. See VAT settings.
Corporation tax#
Calculated on the profit for the year and paid a set number of months after the year end — nine by default. With carry losses forward on, a loss-making year relieves later profits, so tax doesn't start until the losses are used up.
It appears as Tax on the profit and loss and corporation tax paid on the cash flow, in different months.
Duty#
Set per sale, as an amount per unit. It's a cost of the sale, so it reduces gross profit, and it's remitted on its own schedule.
Employer's NIC#
Part of what a hire costs rather than a tax on the business's profit. See Loaded employee cost.
Where it's all configured#
Company options → Tax. See Corporation tax, NIC & duty and VAT settings.
Related#
- Cash flow statement — where the payments land.
- Balance sheet — where the amounts wait.
- Dates & period rules — the timing settings.