VAT Calculation

[Kugel]

so question is will HMRC fine me for a late return and or payment? Is it worth at least doing the calculation and paying up on time even if I don’t get the return in on time?

If it is first time within last 12 months - there will be no penalties, but you will get a letter from HMRC.

Also missing deadlines may invalidate your Tax inquiry insurances if you have any.

[CrackingtonCPlusPlus]

Thanks for the replies, the £20k is just some imaginary figure and yes I got net and gross the wrong way round. Anyhow, now I’m back home I can just look at previous vat returns done by my accountant. Simples.

The big issue now is that I don’t know how to submit the return - I haven’t done my own vat for years but last time I did it myself I think I probably used a govt gateway Id to login. That Id is no longer valid.

So my accountant is Nixon Williams and they sent out an email stating that it’s unlikely that they’ll be able to submit my return on time (7 Feb) because of a cyber attack. It’s only because I have a reminder on my phone that I realised one was due - I always just used to reply to their emails with my invoices for the period and they did the rest.

They have all the details on where it is I need to go and passcodes and or IDs that I might need but they don’t reply to my emails nor do they answer the phone. So I don’t know how to submit my return!

so question is will HMRC fine me for a late return and or payment? Is it worth at least doing the calculation and paying up on time even if I don’t get the return in on time?

[Lance]

The more I read this post the more it hurts!

Like trying to explain to an accountant how his business would be destroyed if he got ransomwared.....
I bet SJD are listening now

[Craig@Clarity]

The more I read this post the more it hurts!

[Lance]

(Ignoring the mix up between gross and net, since gross = including VAT and net = excluding VAT)

d'oh..... Don't ask me about debits and credits then....

Fixed price contract, maybe (but an odd number to choose), alternatively I suspect they may have already screwed it up and quoted a price as net, but invoiced it as gross.

One would have thought the agency would have spotted that and complained. Unless the OP undercharged, which seems possible. Speculation though.

@OP - how about putting the actual invoice (redacted) figures here so we can see better?

[WTFH]

Daft question.... WTF day rate are you on that you have charged the client £16,667 + VAT?
Or have you already screwed this up?

(Ignoring the mix up between gross and net, since gross = including VAT and net = excluding VAT)

Fixed price contract, maybe (but an odd number to choose), alternatively I suspect they may have already screwed it up and quoted a price as net, but invoiced it as gross.

[Lance]

Sorry if this is stating the obvious but I’m going to be doing my own VAT return this quarter owing to my accountants’ systems being down.

If I’ve invoiced for £20k net (i.e. including 20% VAT) the amount I have to pay will be 16.5% x 20k?

I’m assuming it is but if anyone could confirm, that would be great. Thanks.

take the net figure and divide by 1.2 to get the gross.
Take the gross from the net to get the VAT.

£20k/1.2 = £16,667
£20000 - £16,667 = £3,333

Always double check by multiplying the gross by 1.2 to make sure it matches the net. So £16667 x 1.2 = £20000.04 (close enough as there will often be rounding errors)

Daft question.... WTF day rate are you on that you have charged the client £16,667 + VAT?
Or have you already screwed this up?

Caveat: Assumed VAT rate of 20%. Assumed not on FRS as why would you be.

[JHamp82]

Sorry if this is stating the obvious but I’m going to be doing my own VAT return this quarter owing to my accountants’ systems being down.

If I’ve invoiced for £20k net (i.e. including 20% VAT) the amount I have to pay will be 16.5% x 20k?

I’m assuming it is but if anyone could confirm, that would be great. Thanks.

Net pay is invoice value before VAT but if this is inclusive of VAT then it will be gross and assuming you are on the flat rate scheme and a limited cost trader ( and have lost your 1% discount) your VAT liability will be £20,000 X 16.5%= £3,300.

If 20k is net without VAT then VAT inclusive invoice will be £24,000 and VAT to pay based on 16.5% will be £3,960.00.

[Chris@Intouch]

Net pay normally refers to the amount before VAT, i.e. the amount you have billed.

If that is the case your gross invoices will be £24,000 (£20,000 net + £4000 VAT).

From your post you are registered on the Flat Rate Scheme. The flat rate scheme calculates a fixed percentage of your gross sales in the period, i.e 16.5% (assuming you are paying LCT rate).

So your VAT liability in this scenario would be - £3,960. (£24,000 x 16.5%).

This is assuming you are not in your first year of registration and that a 1% discount isn't applied to the rate.

[CrackingtonCPlusPlus]

Sorry if this is stating the obvious but I’m going to be doing my own VAT return this quarter owing to my accountants’ systems being down.

If I’ve invoiced for £20k net (i.e. including 20% VAT) the amount I have to pay will be 16.5% x 20k?

I’m assuming it is but if anyone could confirm, that would be great. Thanks.