Accounting/VAT question

[Sanke]

Afternoon all
Up to know when completing an invoice for my customers I have shown the same amount as I have paid to my supplier for parts However, I feel that i should perhaps make some small profit on the supply of these goods So if I then increase the amount of the "parts", what happens about the VAT as this figure should increase as well ? I am not VAT registered

 

[a12jpm]

Doesn't matter. If your not vat registered take the gross (vat included) price and add your profit. Your not reclaiming vat and as long as your not charging it your good. That is until you reach the threshhold which is circa £78k over the previous 12 months (I think).

 

[Sanke]

I use microsoft accounts which calculates the VAT Therefore if i raise the amount for parts it automatically increases the VAT amount as well

 

[UNG]

I use microsoft accounts which calculates the VAT Therefore if i raise the amount for parts it automatically increases the VAT amount as well

I'm a bit confused as to why you are accounting for VAT in your accounts when you are not VAT registered

The method you are using works as any %age uplift on the base (vat free) cost will increase the VAT figure by the same amount

 

[Sanke]

With my accounting program you can run a report which shows all the invoices This automatically removes the VAT & shows gross figures The VAT element as far as i can see is ignored as I am not VAT registered (even on the monthly profit/loss report) What I could do is enter a "miscellaneous parts" or "van stock" & make it VAT 0% This would not then affect anything else

 

[SirKit Breaker]

Dont see the problem!

dont do VAT, not registered. Take gross cost of materials and add 20% easy So if i buy 10 sockets, 10 surface pattresses and it costs £25 inc VAT, then it cost £25. Add on profit @ 20% = £5, so Total materials
equals £30..........or am i missing something? this works on my spreadsheet everytime.

Cheers...............Howard

 

[Sanke]

From what I can gather you all enter your parts gross So I will change the accounts package to show 0% VAT on parts and start adding mark up to see what happens Thanks guys for your help

 

[lloyd1980]

mate

if ur not VAT registered then dont worry, ignore VAT all together your not bothered with it
ALWAYS charge a mark up on supplied goods
never supply at cost as youve spent time buying them and have to offer guarantee on the goods
always always mark up
if u make a profit on the materials then this just bumps up your account
I cant beleive youve been shopping for customers and then giving them the stuff at cost price??
would tescos or morrisons do the same?, would garages give you deisel for the same price they bought it wholesale???????
NO
ur a business and are there to make a profit
never be ashamed to hold your hand out for money - every bugger else does it to you
Lloyd

 

[High Tower]

lloyd where u been man

 

[dixon9]

I cant beleive youve been shopping for customers and then giving them the stuff at cost price??
would tescos or morrisons do the same?, would garages give you deisel for the same price they bought it wholesale???????
NO
ur a business and are there to make a profit
never be ashamed to hold your hand out for money - every bugger else does it to you
Lloyd

Well said sir!