How to charge for vat

[Rockpig (Ali)]

Hi, I wonder if you can help me.

I am off to the accountant on thursday but would like some sort of idea how it works before hand.

I am going to ask about being vat registered for my new buisness.

Question 1

Say I hire a digger and driver out for the day at £100.
Then have to take away some spoil say 12 ton at £160, i then supply hardcore and paving slabs say another £100.

Do I add vat to all the prices or is it only materials?

Question 2

I have 2 quotes for a job that a estimator has done for me, one includes vat which is cheaper to the customer and 1 with out vat which is more expensive, if he is building a new dwelling does this count for 0% vat therefore I pay for vat then claim it back later?

Many thanks in advance

Ali

[3pic]

If you were VAT registered, you would charge VAT on the total value of your supply to the customer. In your example for Q1, that would be the digger/driver, the hardcore and the waste removal.

As for Q2, if I understand correctly, you have two quotes to provide some sort of construction services relating to a new build house. Generally speaking, your invoice would be zero rated, meaning you charge VAT but at 0% (instead of 17.5%) - this is different to not charging VAT at all as if you did that, you'd not be able to reclaim any input tax (ie, the VAt on your purchases).

Suggest you have a good read of this Notice which is all about building new properties as there are many pitfalls for getting it wrong :-

http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageVAT_ShowContent&id=HMCE_CL_000513&propertyType=document and pay particular attention to Section 3 and also 3.4.2 which looks at hire goods (with no operator) which is NOT zero rated.