Inovices & VAT Question

[taz]

I am looking for assistance with writing up invoices:

If a sole trader buys materials of a builder provider for the job
Material: €3000.00
VAT @ 21%
Total : €3600.00

Labour €1000.00
VAT @ 21%
Total: €1210.00

Total Invoice: €4810.00

OR
Material: €3600.00
Labour: €1000.00

VAT @21% €966.00

Total: €5566.00

21% charged on VAT due to 2/3rds rule.

So I want to know if the VAT already paid on materials by sole trader is taken into account before or after additional VAT charged due to the providement of goods and services.

Sorry if silly question. Wanted to get advice as can not contact accountant until morning.

 

[jpd]

Presumably too late, but the VAT is charged on the amount you invoice the customer.

Under 1) above you would charge the customer 4840 (not 4810) and you would owe the revenue 840, thus your net revenue is 4000.

Your costs would be 4000 plus VAT of 840 making you a net of zero on the contract.

Under 2) you charge the customer 5566, and you owe the revenue 966 leaving you with net revenue of 4600

Your costs are 4000 plus VAT of 840 making you a profit of 600 on the contract

 

[mathepac]

@taz This topic has been covered here in excruciating levels of detail already a number of times, try using the search button.

@jpd your VAT sums are not correct either

You both seem to assume zero uplift on the resale of the materials to the customer, which is rather unusual.

 

[mathepac]

Once more with feeling,

Sole trader buys materials for a job
Material: €3,000
VAT @ 21% = €630 VAT paid out
Total : €3,630

Material: €3,300 (say 10% Up-lift on materials)
Labour €1,000.00
Total To be Invoiced to Customer €4,300
plus VAT @ 21% = €903 VAT received

Total Invoice: €5,203

Net VAT Payable to Revenue (903 - 630) = 273

Gross Profit on Job
Materials : (3,300 - 3,000) = 300
Labour : (1,000 - actual labour costs) = X
Total = 300 + X