VAT Query

[dow jones]

i'm preparing a budget for a restaurant, for vat purposes is it correct to say that we charge vat at 13.5% or 21.5% depending on our sales (food/drinks/takeout/sit down) and that we can deduct any vat we have paid on our invoices? also as most of our inputs will be vat rated at 13.5% and our sales will be a mixture of 13.5% and 21.5% anyone have a guess of what a vat bill on sales of e100k might be, i'm guessing around e12k or am i away out?. when would we have to pay that vat? many thanks for any help

 

[Graham_07]

Sales of restaruant food/beverages are 13.5%
Any other drink, minerals, alcohol would be 21.5% (NB bottled water is 21.5%)

Your re-sale inputs will be largely 0%. Most foodstuffs, meat, veg etc. are 0%. However some at 13.5% like confectionery and some at 21.5% like ice cream.

Your expense inputs will be a mixture depending on the set up but would include
power,light & heat at 13.5%, phone 21%, insurance (no VAT) maybe leasing 21.5%, advertising Repairs etc.etc.

It is not easy to estimate net VAT payalbe based on sales as it depends on the composition of the inputs. The best thing to do is do the cashflow and do a VAT section at the end, using the rates on the main headings to estimate it.

VAT can be filed ever 2,4,6 or 12 months depending on registration, turnover etc. Revenue will often start new businesses on 2 monthly filing then depending on the level of operations and VAT liability might extend that. VAT is payable by the 19th day of the month following the end of the VAT period or the 23rd of the month if filed online through ROS. (Revenue Online Service)

You can also , once you have an idea of the liability, go on direct debit and file the return annually then.

 

[dow jones]

thanks graham, thats very helpfull, i rang the vat section of the revenue 2 days ago and am still waiting but i'm sure their busy

i know its difficult to estimate but if our sales were split 50/50 between 13.5% and 21.5% our vat on sales would be e17,500 and if our vat on expense inputs and re sales inputs came to e5500 would i be correct in saying our bill would be e12,000 or am i missing something?

 

[Graham_07]

thanks graham, thats very helpfull, i rang the vat section of the revenue 2 days ago and am still waiting but i'm sure their busy

i know its difficult to estimate but if our sales were split 50/50 between 13.5% and 21.5% our vat on sales would be e17,500 and if our vat on expense inputs and re sales inputs came to e5500 would i be correct in saying our bill would be e12,000 or am i missing something?

No that's right, you deduct VAT on your inputs from VAT on your outputs and the amount owed by you to Revenue / to you by Revenue is the difference.

Bear in mind that in your example you mentioned sales of €100,000. If that is the EX VAT amount then your figure of €17,500 would be correct, i.e. VAT at 13.5% on 50,000 net and same at 21.5%. However if the €100,000 is the gross sales received the calculation is as follows :-

50000 incl 21.5% net = 50000/1.215 = 41152. VAT on 41152 = 8848
50000 incl 13.5% net = 50000/1.135 = 44052. VAT on 44052 = 5947
Total VAT in that case is 8848+5947 = 14794

Same would apply to the inputs.