invoicing help and vat

[elletheboy]

I’m have an invoice to do for a job,It’s a staircase I made for new house build,Which I am making and fitting!I am supplying materials and labour for the construction of it.
Can you do me a template please of the way it should be laid out on the invoice and what details I should show? I’ll add the info below,

Initial quotation £9350.00

Material costings £6163.82
+ vat £1232.76
= £7396.58

Extra works = £1200

Also is there something when I’m doing my vat return I show materials in earnings??

Another question entirely, The rent I receive from house next door, Do I show it in my vat return,box 6 earnings??

 

[Scalloway]

I assume you quoted net of VAT.

Work done as quote.........................£9,350.00
Extra works .........................................£1,200.00
TOTAL NET..........................................£10,550.00
VAT @20%.............................................£2,110.00
TOTAL DUE...........................................£12,660.00

Also is there something when I’m doing my vat return I show materials in earnings??

If you bill as above materials are not included earnings.

The rent I receive from house next door, Do I show it in my vat return,box 6 earnings??

This is not part of your income for VAT.

 

[elletheboy]

I assume you quoted net of VAT.

Work done as quote.........................£9,350.00
Extra works .........................................£1,200.00
TOTAL NET..........................................£10,550.00
VAT @20%.............................................£2,110.00
TOTAL DUE...........................................£12,660.00



If you bill as above materials are not included earnings.



This is not part of your income for VAT.

Hi,Scalloway,thanks so much for you help,yes I quoted net of vat
I thought i don’t have to charge client the vat if I’m doing the fitting on the new build?
I was going to put on invoice as follows!

Supply & Fitting of Staircase at new build “ put the address in”
Net Price £
Vat is zero
Gross price is same as Net Price

No need to show breakdown of labour & materials
??

 

[MyAccountantOnline]

@elletheboy have a read of this it should help

 

[Scalloway]

No need to show breakdown of labour & materials
??

Not for VAT. If your customer is a private individual or you have gross status for CIS you do not need to mention materials.

 

[Caroline_Pegden]

On the VAT - just one point: are you VAT registered? If not, you shouldn't add the VAT to the invoice.

All the best!
Caroline

 

[elletheboy]

Not for VAT. If your customer is a private individual or you have gross status for CIS you do not need to mention materials.

Thanks,ok,how would the accountant know how much of the payment I receive is taxable if I didn’t show how much the materials cost?

 

[elletheboy]

On the VAT - just one point: are you VAT registered? If not, you shouldn't add the VAT to the invoice.

All the best!
Caroline

Hi Caroline,yes I’m vat registered

 

[elletheboy]

Thanks,ok,how would the accountant know how much of the payment I receive is taxable if I didn’t show how much the materials cost?

Sorry for being a bit naive,But I only used to charge vat on my labour sometimes but recently I’ve started a different line of my would eg making stairs and other things and now I am supply materials which I never done before and just want to make sure I am doing everything correctly.
Paul

 

[Scalloway]

Thanks,ok,how would the accountant know how much of the payment I receive is taxable if I didn’t show how much the materials cost?

When a contractor is paying you and they need to deduct CIS tax they need to know what the spilt is between materials and labour. When I dealt with it the rule of thumb was that if the sub contractor did not give a breakdown the labour was assumed to be 50%. With the figures given above this would mean you would have more tax deducted than necessary.

When your self assessment is prepared you need to give your accountant all your bills for materials as that is a cost that can be deducted from your taxable profits. Your accountant will just look at the totals on your invoices, they will not be interested in the split of your sales between labour and materials.

 

[paulears]

I'm very confused? Scalloway answered this. Surely if you're VAT registered then you've been in business a while, so why are you confused over the figures? You generate invoices, you pay the bills for materials? It's irrelevant if you put a markup on the materials or sell at cost. Your self-assessment is money in, less costs of doing business = what you get taxed on?

As to the weird VAT status of new building works - I'm glad I don't deal with that at all!

 

[DWS]

When a contractor is paying you and they need to deduct CIS tax they need to know what the spilt is between materials and labour. When I dealt with it the rule of thumb was that if the sub contractor did not give a breakdown the labour was assumed to be 50%. With the figures given above this would mean you would have more tax deducted than necessary.

When your self assessment is prepared you need to give your accountant all your bills for materials as that is a cost that can be deducted from your taxable profits. Your accountant will just look at the totals on your invoices, they will not be interested in the split of your sales between labour and materials.

Hi Scalloway, not quite sure what you mean by the 50% rule of thumb, if the sub-contractor can not provide a proper Invoice detailing the material element then surely they are charged 20% tax on the full amount of the Invoice (depending on the rate they were verified at of course).

 

[Scalloway]

not quite sure what you mean by the 50% rule of thumb, if the sub-contractor can not provide a proper Invoice detailing the material element then surely they are charged 20% tax on the full amount of the Invoice (depending on the rate they were verified at of course).

It is probably at least 15 years since I dealt with this. That is what I was advised at the time but things may have changed.

 

[justintime]

At the end of the day it's immaterial as the subby will still end up paying the right tax, but the correct method is CIS @ 20% excluding any materials shown.