Calculating VAT

C

corkcarl

Guest
Hi all,

I'm new to this so hope you can bear with me.

I've recently taken over a business where i worked for a number of years and am now registered as a sole trader of a small business. My only concern is calculating VAT on sales. My accountant has informed me that it is done by taking all the cash and laser payments and calculating the 13.5% on them (which makes perfect sense).

he also includes my monthly sales invoices which I wont recieve payment for 30 days (or more in this climate). I have heard conflicting advice on this as some say you should only pay VAT on all income (cash, laser and cheques).

If somebody could help I would be extremely grateful.

Thanks
 
You can register for VAT on a "money received" basis which means that you pay the VAT on the sales when you are paid. So you can elect to have the credit sales taxed when you receive payment. In this way your cash sales are entered for VAT as they happen ( cash/VISA/Laser ) and your credit sales would be entered for VAT when they pay you not when you invoice them. This election is available where 90% of your sales are to non-VAT registered persons and/or your turnover is under €1,000,000. Your accountant should know about this.
 
thank you so much for clearing that up. Basically my accountant is adament that his way is correct even though it never made sense to me.
 
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