Vat on a service with goods

[new user]

I'm new to this billing customers etc. and it's probably a simple one so hopefully someone will help me. When I'm invoicing a customer for services provided I charge the amount plus vat at 13.5%. If I'm to supply materials along with this service do I charge the customer the net amount or the gross amount of the product cost. Say the material cost me €100 + vat at 23% (€123), and the labour cost is €500. Do I charge the customer €600 + vat @13.5% or is it €623 + vat @ 13.5%. Thanks

 

[smeharg]

I presume you are registered for VAT?

You charge the net amount of the product cost and add VAT on to that.

If the cost of the goods is less than 2/3rds of the total invoice (goods plus labour) then, to use your example, you would charge €600 plus 13.5% VAT.

If the cost of the goods is more than 2/3rds of the total then you either charge the rate applicable to the goods on the whole lot, or you can split it out and charge 13.5% on the labour and 23% on the goods. But to do this you must state exactly what and how much is chargeable at each rate.