Billable expenses - VAT Return

[Rudster]

Hi all

I've been using Quickbooks 2008 to run the company accounts, which is the most unstable software product I have ever encountered (including Microsoft).

Anyway, I'm trying to file a VAT return for the last quarter and it's including my billable expenses on the return (I guess this is because I included them on an invoice). This is the first contract I've won with billable expenses and I just wanted to clarify that expenses (hotels, travel) should not be included in the sales for that quarter?

If not, how do I adjust the sales figure in QB ... unfortunately the Quickbooks web site is down ... unbelievable crock-a-tulipe!

Thanks...

JR

[Bluebird]

Hi all

I've been using Quickbooks 2008 to run the company accounts, which is the most unstable software product I have ever encountered (including Microsoft).

Anyway, I'm trying to file a VAT return for the last quarter and it's including my billable expenses on the return (I guess this is because I included them on an invoice). This is the first contract I've won with billable expenses and I just wanted to clarify that expenses (hotels, travel) should not be included in the sales for that quarter?

If not, how do I adjust the sales figure in QB ... unfortunately the Quickbooks web site is down ... unbelievable crock-a-tulipe!

Thanks...

JR

O though they were included eg:

Onvoice to Client:

Work Done = £10,000
Expenses = £2,000
VAT = £2100 [ 17.5% of 12k ]
Invoice amount to client = £14,100

so then when you make you VAT return you pay to HMRC the £14,100 or whatever the amount is based on FRS.

[Rudster]

Ah OK,

The company is on the FRS, so example to clarify...

--- Calculations

Net sales £9,000
Exp inc VAT £1,000 (Hotels / Toll)
Exp not VAT £1,000 (Mileage)

Net total £ 11,000
VAT £ 1,750 (of £10k)

GROSS SALES £ 12,750
(VATABLE GROSS £11,750

FRS VAT £1,527.50 (VAT GROSS * 13%)

--- VAT Return

Box 5 = £1,527.50
Box 6 = £11,000

---

... is that right?

Ta... JR

[Bluebird]

Ah OK,

The company is on the FRS, so example to clarify...

--- Calculations

Net sales £9,000
Exp inc VAT £1,000 (Hotels / Toll)
Exp not VAT £1,000 (Mileage)

Net total £ 11,000
VAT £ 1,750 (of £10k)

GROSS SALES £ 12,750
(VATABLE GROSS £11,750

FRS VAT £1,527.50 (VAT GROSS * 13%)

--- VAT Return

Box 5 = £1,527.50
Box 6 = £11,000

---

... is that right?

Ta... JR

I was under the impression that if you bill the client for "expenses" then these form part of the service you provide, and therefore you charge VAT on them.

So in your scenario, you invoice £11k, the VAT you invoice is £1925, the VAT you pay is [ 13% of 12925 ] = £1680.25

But I'm not an accountant and I'd check the bit about non-vatable expenses...

[expat]

I was under the impression that if you bill the client for "expenses" then these form part of the service you provide, and therefore you charge VAT on them.

It can be so, but it ain't necessarily so.

Did the client agree to reimburse your expenses, or to allow you to add the amounts to your invoice? These are the 2 quite different choices. Each is in itself valid, but what was agreed?

[NetwkSupport]

totally correct bluebird

I used to bill a client re-chargable expenses in exactly the same way (I paid for my car hire, hotel etc in advance for the month then they paid me it back)

Ok heres what to do (example)

consultancy £10,000
re-chargable expenses £2,000

total £12,000
vat @ 17.5% on £12,000 = £2,100

invoice total £14,100

so HMRC will expect £2,100 to be paid back for that invoice

unless you're on the flat rate scheme. You should run everything by your accountant though, thats what you pay them for

[NetwkSupport]

"re-chargable" expenses and "expenses" are two completely separate things.

One the client pays you back for and the other is expenses your ltd co has incurred

[Rudster]

Up to now, I have just added the expenses to the bottom of the service invoice, but the client has now asked me to invoice them seperately.

To be honest, the client is flexible ... so what would you recommend?

So in your scenario, you invoice £11k, the VAT you invoice is £1925, the VAT you pay is [ 13% of 12925 ] = £1680.25

... surely mileage is exclusive of VAT as the supplier (employee) is not VAT registered and therefore should not be included in the FRS calc?

Ta...

JR

[cojak]

QB can't cope with FRS - that's why I'm dumping it now I'm afraid...

[Rudster]

QB can't cope with FRS - that's why I'm dumping it now I'm afraid...

... it is possible to do it using VAT adjustments but it's a pain

To be honest, I think I may revert to an Excel file combined and the HMRC tools.

JR