Calculating tax/vat

Radsteral

is it 1000 x100 : 0.80 = 250 .
and
1250 x 0.2 = 250

Radsteral

i understand now . thanks alll

mrkbrrws

Ste_C wrote: »

For CIS

If the £1000 is gross, I'm not sure what the formula is but the CIS tax would be £166.66. i.e £833.33 x 20% = 166.66

If the £1000 is net, the CIS tax would £1000 x .20 = £200

That doesn't look right...

If £1,000 is gross, CIS deduction is £1,000 x 20% = £200
If £1,000 is net, CIS deduction was £1,000 x 0.2 / 0.8 = £250

VAT and CIS work differently, VAT is added to your sales but CIS is deducted from your income (and VAT is added to your expenses, where applicable, but CIS is deducted from payments to subcontractors).

DCodd

CIS Calculations as follows:

Deduct 20% from the NET amount (Before VAT is Added) If your subbie is vat registered his invoice MUST show the NET amount. Then add the FULL amount of VAT and pay that figure.

Remember that Materials purchased, if shown seperately, should not have the 20% deduction applied to them.

All other expenses inc fuel or mileage have to have the 20% deducted from them.

e.g. On an invoice of £1000.00 + Vat = Total Invoice for £1150.00

£1000.00 Net
(£200.00) Tax
£800.00
£150.00 vat
£ 950.00 to pay

If your subbie is not VAT registered then you would pay the £800.00 without the vat added.