SA - Business Purchases

shaneshaneshane

Hi Guys

I am sure this will have been asked before but it's just a quick question I cannot find the answer to...

When working out my profit (first SA) obviously it's turnover - expenses

The question is... for expenses, my purchases on products for business use, do I include VAT or Exclude VAT.

E.G:
Turnover: £1000

Total expenses - £120 (Including VAT @ 20%)
or : Total expenses - £100 (Excluding VAT)

Profit = £880 or £900?

Thanks guys

chrismac1

if you are VAT registered, exclude the VAT from sales and expenses. if you are not, include the VAT.

shaneshaneshane

Thanks Chris, Just what I needed