VAT has me confused.

K

kittycole

Registered User
Messages
31
I'm not long self-employed and the vat thing really has me confused. I provide a service and am obliged to add 13.5% to my labour bill. that much i know. i also provide materials and pay 21% on them. the bit that confuses me is. do i add my materials plus labour and then add 13.5% or what? if someone could explain i'd be extremely gratefull.
 
Who suggested you charge VAT at 13.5%? This issue has been covered many times here, try using the search facility.
 
had a look, you seem to know a thing or two about it. but if i may, where did the figure 17.35 come from in your previous post, and do you think a 10% up mark is acceptable?
 

Do you mean this calculation? If so then the invoice total of 100.00 for materials purchased in the example will break down as follows :

Widgets Total : 82.65
VAT @ 21% : 17.35
Invoice Total :100.00
 
My understanding is that goods purchased (supply only)are levied at 21% but when supplied and fitted the rate levied is 13.5% of the total amount. So you are the collector of 13.5% = 25.77 and you deduct the amount you paid in VAT already = 17.35 and the balance of €8.42 is due to be paid by you to the Revenue.
 
I checked it up on the revenue website. would you think 10% mark up is standard?. I now have a better grasp of it, thanks so much for your help.
 
imeldaduff said:
My understanding is that goods purchased (supply only)are levied at 21% but when supplied and fitted the rate levied is 13.5% of the total amount...
Click to expand...
As posted previously, not necessarily, the 2/3rds rule applies.

If 2/3rds or more of the invoice total excluding VAT consists of goods supplied, than the applicable rate is 21%.

If you supply professional services only, (accountant or solicitor for example) then the applicable rate is 21%.
 
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