new vat rule

[samm]

can some one help me regarding the new vat rule which has come in since sep 1 2008 regarding sub contractors.

say a sub contractor invoices me for 2000 euros(supply and fit materials)(he used to charge 13.5%vat to me 270 euros)

i now have to pay the vat to the goverment,13.5% vat = 270 euros

but if i then supply this product to a private individual for 3000 plus 13.5% vat =3405(vat of 405 euros),

how much vat do i pay to revenue and how do i show this in my accounts.

if i pay 270 + 405 i lose out? by 270
or do i pay just 405

 

[Graham_07]

You must include the VAT he would have charged as part of outputs (T1 on VAT return ) you get a simultaneous credit for the VAT under inputs (T2 on VAT return ). The overall result is a nil position. ( provided the sub-contractor is registered and has put the relevant statement on the face of the invoice ( see [broken link removed] )