vat for sole trader

J

JackB

Guest
I am a carpenter ill be setting up a small business soon.
My question is, if i supply and fit a wooden floor do i charge 13.5% or 21% vat?
I know if i supply only i will charge 21%.
My accountant reckons when supplying and fitting i can charge 13.5%.
I was told i can charge 13.5% and 21% within the same sale but its then a little complicated to find a quick formular to divide the vat rates.
eg I supply and fit a floor for e700 how do i split rates if the floor costs me e300?
Do i benifit by submitting my supply/fit jobs @ 13.5% therefor reducing my vat bill or is it a case that i will be hit with a higher income tax bill by holding back the remaining 7.5% over the year? answers appreciated thanks
 
I'm not qualified to offer you an expert advice. However, from what I know, If the fittings cost is more than 2/3 of the total job, then you can charge VAT at 13.5% on the whole lot. However, if less than 2/3, charge VAT separately.
 
Thought it would be good to get some opinions from this site who my accountant recommended.
Is that true then, that if my goods i am fitting exceed 2/3rds of the cost of the total job i am subject to 21% vat?
Is there any way around this as i will be purchasing my goods from the uk and wont be charged vat by my supplier. It means i am paying large sums of vat to the revenue every two months. thanks again
 
Technically, you are collecting the VAT for the Revenue from your customers. So make sure your net pricing (before VAT) includes your profits. I am not too sure if you can find away to get around this. You can write to the Revenue to get a definite ruling on this.

By the way, you are paying less for the cost of the materials as you won't be charged VAT by your suppliers though.

Sorry cen't be much of a help.
 
so what about the 2/3rd of the full amount to be 21%? Is it true? I thought and was told that i would pay 13.5% and not 21%. I will have a vast amount of vat going out at 21%. thanks again
 
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