VAT return - Box 7
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    Default VAT return - Box 7

    Hi,
    I am an IT contractor operating my ltd company and as most contractors I have recently switched from the flat rate VAT scheme to standard VAT. While looking for instructions on how to fill in the return I came across a grey area.
    There seems to be some confusion regarding "Box 7 - Total value of purchases and all other inputs excluding VAT". From a search that I did, some say you only need to add up any expense subject to VAT and some just to add up everything except salaries.
    The expenses that I typically have are:
    expenses subject to VAT
    expenses non-vatable (e.g. train tickets)
    pension contributions
    bank charges
    mileage
    client entertainment

    Do you think that all of the above should be included?
    If so what about client entertainment which is not an allowable expense hence I don't claim back the VAT?

    Any advice will be much appreciated.

  2. #2

    Prof Cunning @ Oxford Uni

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    Quote Originally Posted by fotistso View Post
    Hi,
    I am an IT contractor operating my ltd company and as most contractors I have recently switched from the flat rate VAT scheme to standard VAT. While looking for instructions on how to fill in the return I came across a grey area.
    There seems to be some confusion regarding "Box 7 - Total value of purchases and all other inputs excluding VAT". From a search that I did, some say you only need to add up any expense subject to VAT and some just to add up everything except salaries.
    The expenses that I typically have are:
    expenses subject to VAT
    expenses non-vatable (e.g. train tickets)
    pension contributions
    bank charges
    mileage
    client entertainment

    Do you think that all of the above should be included?
    If so what about client entertainment which is not an allowable expense hence I don't claim back the VAT?

    Any advice will be much appreciated.
    Your accountant should be doing this for you to make sure it's done correctly.
    Have you asked them?
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  3. #3

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    Quote Originally Posted by WTFH View Post
    Your accountant should be doing this for you to make sure it's done correctly.
    Have you asked them?
    Thank for the advice but I am asking because I am doing the VAT return myself.

  4. #4

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    When you say "subject to VAT" do you mean zero rated or not subject to VAT?

    I would add up the net price of all the expenses - so for train that's the same since they are zero rated, for example.

    Then put that figure in box 7.

    But if you don't understand what needs to go in and what doesn't you might want to take professional advice.
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    Quote Originally Posted by fotistso View Post
    Thank for the advice but I am asking because I am doing the VAT return myself.
    No you're not
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    In case anyone else has the same question and I can help,
    I just spoke to the VAT helpline and they confirmed that all items in my list should be included except Pension contributions which are considered "income which is outside the scope of VAT because it is not consideration for a supply".

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    Packages like FreeAgent and SageOne will determine this all for you, if you properly code your data entry.

    No need to manually work it out.
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