VAT calculation

WhatsTheVAT

Hi guys, first post here so please be gentle! I'm waiting for a reponse from my accountant but I could be waiting a long time so I figured it would post here.

I'm trying to calculate how much money I need to put aside to cover the VAT that will be due.

Turnover = £8,030.50
VAT Due @ 20% = £1,338.42
Cost of Goods = £1,768.92
COGs VATable @ 20% = £353.78

VAT Due - COGs VAT = £984.64 (this number I need to put aside to cover VAT)

I know this is just on supplies and doesn't take in to consideration all the other deductable stuff.

Thanks all.

InsideInsurance

If your turnover is only 8k why are you VAT registered?

Are all your costs VAT'ed?

If it is then you have collected £1,338.42 VAT from your customers and have paid £294.82 to your suppliers and so net payable to HMRC will be £1,043.60

What industry are you in? Would the flat rate scheme not be better for you?

WhatsTheVAT

InsideInsurance wrote: »

If your turnover is only 8k why are you VAT registered?

Are all your costs VAT'ed?

If it is then you have collected £1,338.42 VAT from your customers and have paid £294.82 to your suppliers and so net payable to HMRC will be £1,043.60

What industry are you in? Would the flat rate scheme not be better for you?

Thanks for the reply Inside.

That is turnover for the week, hence being VAT registered.

I've realized the mistake in my calculation. To calculate VAT on sales I take our turnover and divide it by 6. For some reason with the Cost Of Goods instead of dividing by 6 I did -80% on the calculator. Dividing both figures by 6 gives me the correct figure and tallies with your figure.

Mistral001

WhatsTheVAT wrote: »

Thanks for the reply Inside.

That is turnover for the week, hence being VAT registered.

I've realized the mistake in my calculation. To calculate VAT on sales I take our turnover and divide it by 6. For some reason with the Cost Of Goods instead of dividing by 6 I did -80% on the calculator. Dividing both figures by 6 gives me the correct figure and tallies with your figure.

So your turnover is over £400k a year. Can I ask you what business you are in?

Acc72

Mistral001 wrote: »

So your turnover is over £400k a year. Can I ask you what business you are in?

The OP is probably studying a book keeping course - if that is the case then no problem, why not be up front about it ?

WhatsTheVAT

Mistral001 wrote: »

So your turnover is over £400k a year. Can I ask you what business you are in?

As I said, I was posting on here while waiting for a reply from my accountant. My first year preparing my VAT return before submitting it to the professionals. Yes, turnover is there or thereabouts, and the business I guess would be classed as licenced trade.

WhatsTheVAT

Acc72 wrote: »

The OP is probably studying a book keeping course - if that is the case then no problem, why not be up front about it ?

I'm not studying book keeping though I probably should be! I am being up front- I asked a reasonably stupid question so that I could confirm my calculations were correct (or incorrect.)

Aquamania

Turnover is normally expressed exclusive of VAT

I'm surprised someone who thinks they are turning over £400k a year when they are in fact only turning over £350k a year didn't know this.

Maybe time to find a new accountant ... or maybe just employ a book keeper to help you with these simple matters.

WhatsTheVAT

Aquamania wrote: »

Turnover is normally expressed exclusive of VAT

I'm surprised someone who thinks they are turning over £400k a year when they are in fact only turning over £350k a year didn't know this.

Maybe time to find a new accountant ... or maybe just employ a book keeper to help you with these simple matters.

We pay VAT on our supplies and we charge VAT on our sales. Each week I move the Total VAT Due from our current account to one of our savings accounts to make sure we're fully covered. When VAT return time comes around I go through all of our accounts for the period and total up the VAT we have paid out, which means there aren't any nasty surprises.

Turnover VAT Due COGS VAT Total VAT Due
£7,680.28 £1,280.05 3,102.21 £517.04 £763.01
£8,829.70 £1,471.62 4,390.63 £731.77 £739.85
£7,289.40 £1,214.90 4,670.95 £778.49 £436.41
£7,315.55 £1,219.26 1,795.29 £299.22 £920.04
£9,158.20 £1,526.37 1,497.53 £249.59 £1,276.78

Sorry I can't make the above clearer but I don't know if I can make tables here or not. Also sorry but my account seems to have changed as I've moved from Chrome to Firefox, so sorry to add confusion there!

martindow

WhatsTheVAT wrote: »

. My first year preparing my VAT return before submitting it to the professionals.

Normally you pay VAT quarterly. I trust you are not doing this at the end of the tax year like accounts. When did you start trading?

WhatsTheVAT

martindow wrote: »

Normally you pay VAT quarterly. I trust you are not doing this at the end of the tax year like accounts. When did you start trading?

Yes, I understand that. Started trading 1 November 2013 and HMRC have sent a VAT Notice of assessment of tax for the period 1 November 2013 to 28 February 2014.

As I said in my original post, I'm not DIYing and am meeting my accountant this afternoon to go over everything. I posted here because I wanted to make sure that my sums were correct.