E europhile Registered User Messages 802 4 Nov 2008 #1 I'm getting some tiling work done. I've selected the tiles which the tiler is purchasing. Say they cost €1,000 plus VAT at 21% = €1,210 and labour is €500. Total = €1,710. The tiler is charging VAT at 13.5% on the lot. Is this correct?
I'm getting some tiling work done. I've selected the tiles which the tiler is purchasing. Say they cost €1,000 plus VAT at 21% = €1,210 and labour is €500. Total = €1,710. The tiler is charging VAT at 13.5% on the lot. Is this correct?
M mathepac Registered User Messages 8,605 4 Nov 2008 #2 europhile said: ...I've selected the tiles which the tiler is purchasing. Say they cost €1,000 plus VAT at 21% = €1,210 and labour is €500. Total = €1,710. The tiler is charging VAT at 13.5% on the lot. Is this correct? Click to expand... Do you mean he is charging you (€1,210 + €500) x 1.135 = €1,940.85 ? In my view he should be charging (€1,000) X 1.05 = €1,050 for the tiles (Say 5% mark-up on the material costs) So €1,050 + €500 = €1,550 + VAT = €1,550 X 1.21 = €1,875.50 The reason for VAT at the higher rate is the "2/3 rds rule" for labour vs material costs.
europhile said: ...I've selected the tiles which the tiler is purchasing. Say they cost €1,000 plus VAT at 21% = €1,210 and labour is €500. Total = €1,710. The tiler is charging VAT at 13.5% on the lot. Is this correct? Click to expand... Do you mean he is charging you (€1,210 + €500) x 1.135 = €1,940.85 ? In my view he should be charging (€1,000) X 1.05 = €1,050 for the tiles (Say 5% mark-up on the material costs) So €1,050 + €500 = €1,550 + VAT = €1,550 X 1.21 = €1,875.50 The reason for VAT at the higher rate is the "2/3 rds rule" for labour vs material costs.
E europhile Registered User Messages 802 4 Nov 2008 #3 Do you mean he is charging you (€1,210 + €500) x 1.135 = €1,940.85? Click to expand... Yes. The tiles would cost me €1,210 if I were to buy them in the shop.
Do you mean he is charging you (€1,210 + €500) x 1.135 = €1,940.85? Click to expand... Yes. The tiles would cost me €1,210 if I were to buy them in the shop.
U ubiquitous Registered User Messages 3,782 4 Nov 2008 #4 mathepac said: In my view he should be charging (€1,000) X 1.05 = €1,050 for the tiles (Say 5% mark-up on the material costs) So €1,050 + €500 = €1,550 + VAT = €1,550 X 1.21 = €1,875.50 Click to expand... Why, exactly? "2/3 rds rule" only applies if material costs exceed 2/3s of total. Otherwise, he can charge 13.5% for the lot.
mathepac said: In my view he should be charging (€1,000) X 1.05 = €1,050 for the tiles (Say 5% mark-up on the material costs) So €1,050 + €500 = €1,550 + VAT = €1,550 X 1.21 = €1,875.50 Click to expand... Why, exactly? "2/3 rds rule" only applies if material costs exceed 2/3s of total. Otherwise, he can charge 13.5% for the lot.
M mathepac Registered User Messages 8,605 4 Nov 2008 #6 ubiquitous said: Why, exactly? "2/3 rds rule" only applies if material costs exceed 2/3s of total. Otherwise, he can charge 13.5% for the lot. Click to expand... 2/3 rds of 1,550 (total net of VAT) = 1,033.33 Material costs in my example = 1,050 which is greater than 1,033.33, therefore VAT rate = 21%, or are my sums wrong?
ubiquitous said: Why, exactly? "2/3 rds rule" only applies if material costs exceed 2/3s of total. Otherwise, he can charge 13.5% for the lot. Click to expand... 2/3 rds of 1,550 (total net of VAT) = 1,033.33 Material costs in my example = 1,050 which is greater than 1,033.33, therefore VAT rate = 21%, or are my sums wrong?
M mathepac Registered User Messages 8,605 4 Nov 2008 #7 europhile said: What precisely is the two-thirds rule? Click to expand... When the materials portion of an invoice exceeds 2/3 rds of the invoice value net of VAT, than VAT is charged at the higher rate. A couple of examples : Materials 100, Labour 300, Total = 400, VAT @ 13.5%, Invoice = 454 but Materials 300, Labour 100, Total = 400, VAT @ 21%, Invoice = 484. I suspect that either Your tiler isn't registered for VAT He / she doesn't know how VAT works He or she is taking you for a ride
europhile said: What precisely is the two-thirds rule? Click to expand... When the materials portion of an invoice exceeds 2/3 rds of the invoice value net of VAT, than VAT is charged at the higher rate. A couple of examples : Materials 100, Labour 300, Total = 400, VAT @ 13.5%, Invoice = 454 but Materials 300, Labour 100, Total = 400, VAT @ 21%, Invoice = 484. I suspect that either Your tiler isn't registered for VAT He / she doesn't know how VAT works He or she is taking you for a ride
A allaboutheat Registered User Messages 44 4 Nov 2008 #8 That rule does not excist anymore it is 21% on goods and 13.5% on labour this should be charged at seperate rates this being correct. That rule is gone since last year I believe.
That rule does not excist anymore it is 21% on goods and 13.5% on labour this should be charged at seperate rates this being correct. That rule is gone since last year I believe.