13.5% VAT on goods supplied?

L

Lou26

Registered User
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Hi. My husband is a self employed electrician and works mostly in the commercial sector. When he needs materials for a job he buys them from the supplier and usually pays outright (or on account paid at the end of the month). He pays the 23%VAT to the supplier.
When we send invoices to the client we add 13.5% to the labour charge and all the materials bought are listed and charged at 23% Vat (I take the information directly from the receipt).
One of his clients has just told him he should be charging them 13.5% VAT on the materials aswell and then claiming the rest back from revenue.
I can't get in touch with our accountant and can't find anything about this online. I could be searching incorrectly though.
Can anyone point me in the right direction?
Thanks very much!
 
I’m not an accountant but when I’m quoting for jobs I use 23% on all materials/products bought in.
 
Lou26 said:
Hi. My husband is a self employed electrician and works mostly in the commercial sector. When he needs materials for a job he buys them from the supplier and usually pays outright (or on account paid at the end of the month). He pays the 23%VAT to the supplier.
When we send invoices to the client we add 13.5% to the labour charge and all the materials bought are listed and charged at 23% Vat (I take the information directly from the receipt).
One of his clients has just told him he should be charging them 13.5% VAT on the materials aswell and then claiming the rest back from revenue.
I can't get in touch with our accountant and can't find anything about this online. I could be searching incorrectly though.
Can anyone point me in the right direction?
Thanks very much!
Click to expand...
Hi

I am not a tax advisor so double check. But I believe they call this the 2/3 rule for VAT.

Basically, if you supplying goods and Fitting/repairing Services to a Client Vat could be charged at service rate IF the Total goods are Less than 2/3rd of the final bill. IF they are over the 2/3rd of the Final bill then VAT is charged at the normal rate for the Goods.

[broken link removed]


Regards

Joe Beglane
 
irbx said:
Hi

I am not a tax advisor so double check. But I believe they call this the 2/3 rule for VAT.

Basically, if you supplying goods and Fitting/repairing Services to a Client Vat could be charged at service rate IF the Total goods are Less than 2/3rd of the final bill. IF they are over the 2/3rd of the Final bill then VAT is charged at the normal rate for the Goods.

[broken link removed]


Regards

Joe Beglane
Click to expand...
Yes that's also my understanding, vat on purchases is reclaimed in the normal way

So, materials 100 plus vat 23
Job = materials 100 +200 labour = 300 * 13.5% = 40.50 ........net payable for vat on sales/ (job) €40.5 -23 =17.5
 
Thanks for that. Looks like it's the 2/3 rule alright. I've been invoicing people for nearly 3 years and no one has questioned it before now. I'll have a chat with my accountant.
Thanks again
 
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