Quick maths test

[jamesbrown]

Hang on...


If you're providing a service that is non-VAT chargable, then you don't charge the client VAT and don't pay VAT to HMRC either. In other words, you just exclude the invoice(s) from your VAT payable calculations.

As indicated above, if the supply is outside of the scope of VAT, it isn't included in the FRS turnover calculation, so no VAT is charged and none is due. Likewise, if you're not on the FRS, there will be no VAT charged and none due (although it's included in Box 6 each quarter).

[Project Monkey]

Hang on...


If you're providing a service that is non-VAT chargable, then you don't charge the client VAT and don't pay VAT to HMRC either. In other words, you just exclude the invoice(s) from your VAT payable calculations.

[SlipTheJab]

It wasn't intentional to drip-feed the information, I just thought that VAT would not be chargeable so didn't want to confuse the question, but apologies for omitting it first time round.

Worked out the sums in the end and, as it turns out the client are happy for me to invoice their UK subsidiary so I will simply bill £500+VAT as originally intended.

Cheers for all the help though.

Just round it up to a nice even £750

[Willapp]

Rather than drip-feed information, perhaps you should state all the relevant facts at the outset? Anyway, you need to establish if the invoiced supply is outside of the scope of UK VAT. It probably is, but there are place of supply rules. If it's outside of the scope of UK VAT, you do not charge VAT and you also do not include any VAT in your FRS turnover, because - just as the name implies - it's outside of the scope of UK VAT

It wasn't intentional to drip-feed the information, I just thought that VAT would not be chargeable so didn't want to confuse the question, but apologies for omitting it first time round.

Worked out the sums in the end and, as it turns out the client are happy for me to invoice their UK subsidiary so I will simply bill £500+VAT as originally intended.

Cheers for all the help though.

[JRCT]

If you're struggling with this kind of reverse calculation, have a look at the Goal Seek function in Excel.

If you have A/B = C. It will change B for you based on what you want C to be.

[Andrew@Wisteria]

Rather than drip-feed information, perhaps you should state all the relevant facts at the outset? Anyway, you need to establish if the invoiced supply is outside of the scope of UK VAT. It probably is, but there are place of supply rules. If it's outside of the scope of UK VAT, you do not charge VAT and you also do not include any VAT in your FRS turnover, because - just as the name implies - it's outside of the scope of UK VAT

This is correct, so charge £500 to get £500. Include the net sales on your VAT return, but don't include it in calculation.

[jamesbrown]

Hmm ok. Maybe I'm being extra stupid today..

The client in question are not UK-based so I was under the impression I couldn't add VAT if they aren't a UK-registered entity? If this is wrong then problem solved, I'll tag the VAT on. Luckily I'm asking these questions in advance...

Rather than drip-feed information, perhaps you should state all the relevant facts at the outset? Anyway, you need to establish if the invoiced supply is outside of the scope of UK VAT. It probably is, but there are place of supply rules. If it's outside of the scope of UK VAT, you do not charge VAT and you also do not include any VAT in your FRS turnover, because - just as the name implies - it's outside of the scope of UK VAT

[flamel]

So I suck at maths but need to work out the following:

If I agree to charge someone £500 for a piece of work, but the client isn't VAT registered then I can't add VAT onto my invoice. However being on the FRS I will be charged 14.5% of the invoice amount regardless. Supposing I wanted to get £500 after allowing for the 14.5%, how much do I increase my invoice by to compensate and what's the formula?

I'm sure this is straightforward but I've been going round in circles lol. I can get close by guessing a figure (£585 gives 14.5% as £84.825 leaving £500.175) but I want the exact figure

Yes you can call me stupid... maths never was my strong suit.

Whatever the VAT, the maths is:
500 / (1 - 0.145) = 584.80
Work the rest out from there

[Batcher]

Hmm ok. Maybe I'm being extra stupid today..

The client in question are not UK-based so I was under the impression I couldn't add VAT if they aren't a UK-registered entity? If this is wrong then problem solved, I'll tag the VAT on. Luckily I'm asking these questions in advance...

That's different. It depends where they are based. Most countries have a reciprocal arrangement where you null the VAT as long as you put the relevant VAT numbers on the invoice.

You also have to fill in a form every quarter if you are doing business outside the UK listing sales. Your accountant should keep you right.

[Willapp]

Never mind. A quick walk to the toilet and the solution came to me:

1 - 14.5% = 0.855

500 / 0.855 = £584.795

[Willapp]

Hmm ok. Maybe I'm being extra stupid today..

The client in question are not UK-based so I was under the impression I couldn't add VAT if they aren't a UK-registered entity? If this is wrong then problem solved, I'll tag the VAT on. Luckily I'm asking these questions in advance...

[Batcher]

So I suck at maths but need to work out the following:

If I agree to charge someone £500 for a piece of work, but the client isn't VAT registered then I can't add VAT onto my invoice. However being on the FRS I will be charged 14.5% of the invoice amount regardless. Supposing I wanted to get £500 after allowing for the 14.5%, how much do I increase my invoice by to compensate and what's the formula?

I'm sure this is straightforward but I've been going round in circles lol. I can get close by guessing a figure (£585 gives 14.5% as £84.825 leaving £500.175) but I want the exact figure

Yes you can call me stupid... maths never was my strong suit.

You are stupid It's not your maths that is wrong.

It doesn't matter if your client is VAT registered or not. You are providing a service that is liable for VAT and you are VAT registered so you have to charge VAT.

Otherwise shops wouldn't be able to charge VAT to the people who are not VAT registered?

[Willapp]

So I suck at maths but need to work out the following:

If I agree to charge someone £500 for a piece of work, but the client isn't VAT registered then I can't add VAT onto my invoice. However being on the FRS I will be charged 14.5% of the invoice amount regardless. Supposing I wanted to get £500 after allowing for the 14.5%, how much do I increase my invoice by to compensate and what's the formula?

I'm sure this is straightforward but I've been going round in circles lol. I can get close by guessing a figure (£585 gives 14.5% as £84.825 leaving £500.175) but I want the exact figure

Yes you can call me stupid... maths never was my strong suit.