VAT Calculation

shawnwalter

Dear All ,
how i can add vat 5% on purchasing ??
because In my country they calculate VAT like this (VAT On Purchasing )-(VAT On Sales)=VAT I have to pay for government ??..

Devongardener

Are you buying or selling? Are you VAT registered in the UK, if not you cannot add VAT to sales.
if you mean you are selling into another country, any VAT due there will be collected from the recipient at the time of import,  you don’t charge it yourself.

Grumpy_chap

shawnwalter said:

Dear All ,
how i can add vat 5% on purchasing ??
because In my country they calculate VAT like this (VAT On Purchasing )-(VAT On Sales)=VAT I have to pay for government ??..

Are you operating a VAT-registered business?

The calculation will be the reverse of what you wrote:
Output VAT (sales) - Input VAT (purchases) = VAT payment to HMRC

Where do you get 5% VAT rate from?

DullGreyGuy

shawnwalter said:

Dear All ,
how i can add vat 5% on purchasing ??
because In my country they calculate VAT like this (VAT On Purchasing )-(VAT On Sales)=VAT I have to pay for government ??..

Unless you are selling things at a loss in your country you'd normally be VAT on Sales - VAT on Supplies = VAT to be paid to the government

It would normally work the same in the UK if you are VAT registered but there are a few schemes, eg the flat rate scheme, to simply accounting for certain small firms or industries.  So with the flat rate scheme for example you'll simply pay over a fixed percent of your gross sales no matter what VAT you've charged or been charged. 

It would help if you clarify exactly what scheme you are referring to with the 5%

annjohanna

Hi there,

My accountant will be out of town for a few days, and I will be filing my first VAT return under the standard VAT plan soon.


I had a query about profits, but other than that, I have no trouble completing the VAT report.

I always thought you had to include the amount of VAT you collected from sales on the VAT mwst rechner return, however my accountant has requested the whole amount that has been deposited into my bank account.

Therefore, "Sale Price/6" shouldn't appear on my profit sheets.

It should undoubtedly be "(Sale Price - FBA fee + tax - referral fee + tax) / 6," which is what is taxed as it reaches my bank.

Could someone please explain this?

Many thanks!

DullGreyGuy

Profits have nothing to do with the VAT form. 

Section 3 tells you how to complete each of the boxes on the VAT form:
https://www.gov.uk/guidance/how-to-fill-in-and-submit-your-vat-return-vat-notice-70012#section3 

annjohanna

You must go by the guidelines for applying VAT to your sales pricing if your company is registered for VAT in the UK.

To assist you in staying within the law, we provide a comprehensive guide on VAT.

In the parts that follow, we go over what VAT is, how it is calculated, when it is legally necessary for businesses to charge VAT, and more.

annjohanna

The definition of VAT must be understood before we can examine what it means to calculate VAT.

Value Added Tax is what VAT stands for in short. The value added to goods and services is subject to an indirect consumption tax that is applied at various stages of the supply chain. As a result, it eventually influences the total cost that clients must pay.

To put it another way, VAT is a tax that is added to the sales price that companies that are registered for VAT are eligible to claim.

Countries that are part of the European Union are required by law to implement a minimum VAT rate.

annjohanna

The primary goal of VAT is to increase government revenue.

The VAT system was first developed as a less complicated substitute for sales and gross turnover taxes.

Compared to other taxes, value added tax is significantly more visible and quick to track. The primary reason for this is that it accumulates at every stage of the supply chain.

Every business must also maintain a record of all sales, purchases, and supplies.

annjohanna

Some VAT calculators enable businesses to change VAT rates, add tax to a net amount, or subtract VAT from a gross amount in seconds. 

If you decide to calculate VAT manually, you only need to add the VAT rate to the product’s or service’s price. Simply multiply 1.2 by the price you charge (if the applicable VAT rate is standard or 20%). 

For instance, imagine that you sell office accessories for £100. Multiply £100 by 1.2 to receive 120. In this case, £120 is the new price after the added tax. 

annjohanna

Using a Mehrwertsteuer Rechner VAT calculator is among the simplest ways to calculate VAT.