VAT What does and doesnt have VAT on it?

Angela

I am doing my other halfs accounts as he has just started up in business and am a little confused about a few things as to if they VAT on or not and was wondering if there is a site that I can check up and find out.

For example he purchased some Helium we have a receipt which has a vat number on it but the sale has not been broken down with vat and the sale listed seperately(its a hand written receipt),also does bed and breakfast have vat on it,his receipt does not have a vat number on it,however last week when I had bed and breakfast(admittedly a slightly larger hotel)it listed vat and the sale seperately,any help would be most appreciated.

Angela

ash42

any hot food / services/spares/ hotel /are vat
any child clothes /newspaper/veg fresh or tinned/fish /meat are zero rated
sorry dont know any site but customs and excise might be able to help online

MarkyMarkD

If you haven't got a VAT receipt, you can't recover the VAT in any case, even if any has been charged.

Probably the B&B place wasn't big enough to be VAT registered.

It doesn't matter if the VAT is itemised on the receipt; you can work it out for yourself (VAT = 17.5%/117.5% x VAT inclusive amount).

theblindman

True, if you havnt got a 'voucher' (what Tax Inspector called an invoice when he came a visiting) you can't claim. Invoices under £100 do not have to show the VAT seperately but you can only claim if it says invoice or receipt on it and includes the Business name and VAT Number, the correct calculation for VAT is using fractions not percentages I think the current VAT fraction is 7/47, there is a very slight diffecrence between the two methods.

withabix

theblindman wrote:

I think the current VAT fraction is 7/47, there is a very slight diffecrence between the two methods.

7/47 is exactly 17.5/117.5, so there's absolutely no difference whatsoever!!!

That's why it's 7/47...didn't you do fractions at school???

JasonLVC

The supply for the helium will be standard rated (17.5%). LPG gas (used for patios/heating) is 5% but the rental of the bottles will be standard rated too.

Provided invoice/receipt has a VAT No and business name/address and under £250 then the amounts can be deemed to be VAT inclusive and you can extract the VAT from the supply using the either of the two earlier calculations posted. Times 7 divided by 47 is a good way for extracting VAT from an 'inclusive' figure.

It's not a blanket assumption to extract VAT from every invoice you've got. As per earlier post, childrens items will be zero rated as will basic food items(no vat). Visit the HMRC website and search on "zero rating" for a list of items. This list is definitive and nothing else is zero rated. Search for "exempt" to get a definitive lisst of things that have no vat on at all. Everything else you should deem to be standard rated, if it's got that VAT Reg No/address details on it.

So if the B&B doesn't have a VAT Reg no on their receipt then they'll not be VAT registered and therefore will not have charged you VAT. If you recover the VAT and HMRC spot it then they will request you repay it with interest and will certainly get them rooting around your files in much more detail.

Astaroth

ash42 wrote:

any hot food / services/spares/ hotel /are vat
any child clothes /newspaper/veg fresh or tinned/fish /meat are zero rated
sorry dont know any site but customs and excise might be able to help online

I thought those items were VAT exempt rather than 0% rated? (it makes a difference regards reclaiming/ onward charging to your customers)

MarkyMarkD

I think you've got it the wrong way round, Astaroth.

Things like financial services are exempt; things like the ones ash42 listed are zero rated meaning that Sainsbury's (for example) can recover VAT on their inputs even though they don't charge it on a large proportion of their outputs.

Banks/building societies/insurers can't recover much/any input VAT because their outputs are virtually all exempt.

MarkyMarkD

withabix wrote:

7/47 is exactly 17.5/117.5, so there's absolutely no difference whatsoever!!!

That's why it's 7/47...didn't you do fractions at school???

The reason I stated it as 17.5/117.5 is that it means something that way. Because VAT is charged (on most things) at 17.5%, the VAT is "obviously" 17.5% of the net amount, and the gross amount is therefore the 100% net amount + the 17.5% VAT.

The 7/47 is a meaningless fraction which happens to give the same answer as 17.5/117.5; I suppose it takes a few less keystrokes on the calculator but given that nobody works out VAT in their head, I think HMRC should just state the fraction in a way which means something.

Astaroth

MarkyMarkD wrote:

I think you've got it the wrong way round, Astaroth.

Could well have

I was just sure that I had seen VAT Exempt written on the shelf tickets of food when going round Makro rather than 0%, obviously mistaken

JasonLVC

Exempt is not a rate of VAT and as previous poster noted is usually associated with financial products such as insurance, banking, pensions, etc.

Makro normally show things as zero rate or 0% - Makro may well have exempt showing on their labels - but they'll be wrong.