VAT Reduction – how will this affect business?

[Rick Kinloch]

well i think if your planning to expand or buy say a new machine worth 20k then you have saved some cash.

all depends if it’s enough to kick start your typical customer into parting with his cash. i think it will take this plus some more confidence building savings to help.

it’s all well and good doing this but turn on the radio and within 1 hour it’s doom and gloom so i’m not sure if it’s going to be enough on it’s own. all the large plc’s are really advertising on tv hard for xmas with 20% off here and there. they are all trying to get people to part with their xmas money..

it’s certainly a step in the right direction just not sure if it’s enough of a step. plus with xmas on top of us i’m not sure if we will be an accurate picture of the country till jan / feb.

just my 2p.

[Chris Wool]

every little helps.

but a few quid in the pocket a week puts the country in to stupid debt.

the man in the street will hardly notice it.
dreading the next thing they come up with

chris
🙁

[John Thomson]

it makes no difference to a vat registered business…..you will still charge vat and give it to the government and still reclaim vat on your purchases…the rate is irrelevant for businesses except in terms of cash flow.

However for the man on the street or any business that is not vat registered…everything will be cheaper…….

John

[Hugh Potter]

on a hundred quids worth of materials it’ll save me what, £2.50? (i haven’t heard but assume it’s dropped to the 15% i heard banded about). thats £25 on £1000 of materials, or £250 on £10,000.

not being vat reg’d doesn’t really help me much either!

if you’re spending the kind of money it takes to make a great saving, then you’re already vat reg’d and not getting the benefit anyways.

Like Chris said, I’m dreading the next idea they hav, this gov’t have led us from one cock-up to the next, and yet, people still trust them to get us out of this mess.

where has all the money gone, the billions of £££’s from selling off the rights to the digital radio frequencies to vodafone etc, why did they sell (some/most/all?) our gold reserves when gold was at an all time low? at least we had reserves to fall back on.

"for the people"??? which people? those who put nothing in is who. be they the fat cat bosses with their offshore accounts or the layabouts who do nothing but claim. They’ve done NOTHING for me or my mrs, who like the majority of people have put their money into a house, and are decent honest hard working people. we earn slightly too much a year to get any financial help, our savings are gone due to constant hikes on energy bills, fuel, etc, and my bread n butter small sole trader jobs have just about dried up in the past two months, my last £1500 of saving has just gone on advertising, at this current level of work i never have much more than a few hundred quids worth of work ahead of me and, i reckon, if nothing happens in the next few months i’ll be looking for a job and just doing the profitable stuff i do as a smaller niche business in what should be my spare time.

the harder and more hours we seem to work, the worse off we become.

erm… sorry for the rant 😳

back on topic… knowing this lot, if they’re around long enough, no doubt vat will be raised above the old 17.5% when the supposed good times return, so they can recoup the money quicker, then it’ll stay there.

[John Gregson]

Has this been implemented yet, as i’d like to know when to start changing my accountancy software. 👿 Next quarters return will be really easy to fill in – not 😥

This is yet another crazy scheme by the control freaks we call the government. Just let it sort itself out as nothing that’s been done so far has helped one bit.

[Paul Hughes]

johns right

to a VAT registered company who deal mainly business to business it will not make a dote of difference.
it may help retailers to the public,…….if they pass on the saving,

Can you see ‘big store co’ changing the price of a item from say £2.99 to £2.92, don’t think so they will pocket the 7p for them selves and all them 7p’s add up to a nice little christmas bonus 😕

Paul

[John Childs]

A reduction will make little difference to VAT registered companies at all as far as VAT goes, but those of you dealing with the public will have a chance to increase your profits by 2.5%.

The man in the street won’t notice the reduction because he won’t get it. Retailers will all increase their VAT exclusive prices to take the tax reduction into account and the total ticket price paid by their customers will remain the same. And that’s the problem. It will just fuel inflation. We really are governed by idiots.

For us, yes, if you expand or buy a new machine, you will have a small cash flow improvement. But this will be offset by the fact that you will collect less VAT from your customers and keep in your bank account for up to four months before you have to hand it over to HM Jackals.

And don’t forget that any cash flow improvement will only last until your next VAT return, whereas the lower amount of VAT we hold in our accounts will go on forever.

[Paul S Martin]

I will go with that John also

Paul

[Peter Dee]

This is wholly aimed at consumers as they (plus non-registered small businesses) are the ones who pay it.
However, not enough to make us think that everything is better now so we can spend freely.
Mind you, if it was going up 2.5%, everyone would be complaining bitterly.
Bit of a vote catcher IMHO.

The payback will come when they put it up to 22.5% when things seem better which they are highly likely to.

As for the 45% tax on high earners. Not to come in to effect until 2010.
Why? Well the Conservatives will most likely get in power then, and they will not instigate it, allowing Labour to slag them off as Toff lovers.

[David Lowery]

What’s the betting if VAT goes down, petrol goes UP!! 🙄

Won’t do much for us either, being VAT registered, just might be a little less traumatic when the VAT bill is due.
Got a call off the VAT man once saying that he was chasing payment?
Put him on hold and asked Christine why it hadn’t been paid to which she replied, it wasn’t due for another fortnight. When I told this chap that, he said he knew and he was just making sure. I then laid into him as to why an unpaid tax collector like us should be reminded about payment when we had never made a late payment in our entire life and that some companies that had gone bust on us were showing that they had not paid VAT in two years!!! 👿

[Phill Fenton]

A couple of years ago we switched over to a simpler way of calculating our VAT liability bill which is calculated as a percentage of our turnover (rather than VAT collected minus VAT paid out). This is currently fixed at 8.5% of our turnover (inclusive of VAT). I wonder if the 8.5% figure will be reduced for us & the many other businesses in the same position?

[Graeme Harrold]

Its going to help me out a little with a whopping saving of £25 (not even a case of mugs!!) on a grands worth of dye-sub kit. 2.5% is minuscule and wont be noticed by most.

My pricing wont change, Ill just say material prices have gone up more!!!

On a personal not, we are about to spent £12K on double glazing, a conservatory and another £5-6K on a kitchen. we did hold back on placing an order awaiting confirmation of today’s drop in rate……..

[David McDonald]

Hi All

I could be wrong but it will slightly benefit us registered for VAT

Say you bought £500 materials and charged job at £1000, old way with 17.5% you pay £587.50 inc VAT and charge £1175 inc vat, you then pay £87.50 to the vat man (the difference between £175 and £87.5 ie. the VAT on your markup), do the same with 15% and you then pay only £75 to the vat man – so an extra £12.50 profit.

Using this example if you had the materials in stock and have already claimed back 17.5% VAT and sell with 15% VAT on then you pay the VAT man £62.50 so you have made an extra £25.

When I apply this to the vinyl in stock and already paid for then I think this will benefit me by about £150??

Cheers
Macky

[Peter Normington]

David It would be nice if you were right,
I dont know if you are or not, but as we only collect the tax and do not get to keep any of it, then I am not sure where you are making a profit on the vat?

I can see your logic, but i think the sums are wrong somewhere,

I get all my vat back, but the government get all the vat I charge, so on balance it dosnt matter what the figures are, its only the end user that is not vat registered that benefits from the lower figure,

Is there an accountant in the house?

Peter

[John Childs]

Macky, close, but no cigar. 😀

Materials in stock you’ve paid 17.5% on and claimed back the same 17.5%.

Now you sell them at 15%, and pay the same 15% to HM Jackals.

You are no better off.

[Graeme Harrold]

Quite right only works on those with a fixed final sales price and dont compensate for the reduction in VAT (retail). :lol1: :lol1:

If your pricing structure is £££+VAT then as Jon says…….no difference 😥 😥

[David McDonald]

Still can’t get me head round this

You can claim back everything you paid VAT wise and you have to pay back everything you charged VAT wise, one is greater than the other hence why you get a VAT bill because you ‘sell’ a higher VAT amount than you ‘buy’. That difference is now going to be ever so slightly smaller so your VAT bill is now less???????? Output minus Input tax and all that.

Anyway at the moment I’m more worried about people who already owe me money paying, rather than worrying too much as to whether this change will mean I have £2.50 a year extra to encourage me to go out on a spending spree. UV flatbed here I come!

Cheers
Macky

[Chris Dowd]

The BIG question is…… are HMRC going to write to every one who is VAT registered and tell them officially that the rate will change next Monday?

I doubt it very much!

[Peter Normington]

quote David McDonald:

Still can’t get me head round this

You can claim back everything you paid VAT wise and you have to pay back everything you charged VAT wise, one is greater than the other hence why you get a VAT bill because you ‘sell’ a higher VAT amount than you ‘buy’. That difference is now going to be ever so slightly smaller so your VAT bill is now less???????? Output minus Input tax and all that.

Cheers
Macky

the vat bill is less, but you haven’t gained, you have just paid the government less of their own money..which wasn’t yours in the first place.

sorry can someone explain more simply?

Peter

[Peter Normington]

quote Chris Dowd:

The BIG question is…… are HMRC going to write to every one who is VAT registered and tell them officially that the rate will change next Monday?

I doubt it very much!

Chris, What happens if they dont?

My take on it is it wont make the slightest difference to most people.
I doubt if I would change my decision to buy a computer for persomal use just because i will save £12.50 on £500 machine,

where it may induce people to spend is on large home improvements, and the like, but I doubt it.

Peter

[Chris Dowd]

If they don’t Peter, then why should we implement the change?

Like you say, it won’t make the slightest difference to most people, however, there are going to be a huge amount of small businesses out there who’s products are priced including VAT that will have to change all their prices, could be one hell of a time consuming exercise!

Be interesting to see if the likes of B & Q have all their new prices in place for Monday morning!

[Peter Normington]

Chris I doubt if the prices will change nobody says they have to lower them,
We will see, but I bet stuff at 2.99 and even 19.99 will still be the same,
the the vat reduction will be used to enhance the profit, not passed on to the end user.

Just my opinion though, lets wait and see.

Peter

[John Harding]

Yes theres no benefit if your vat registered unless you put up your net prices to swallow the vat reduction thus making your work more profitable.

Non vat registered signmakers benefit as their materials are now cheaper.

John

I assume we just adjust our vat figures monday morning

[Peter Normington]

the whole point about the vat being reduced is to encourage the end user to spend, not to increase the profit to the provider of the goods/services

I somehow think the end user will not see a saving.

Anyone like to comment on the price of petrol?

Peter

[Chris Dowd]

89.9p round here!

[Phill Fenton]

So VAT goes down which means petrol goes down – but then they go and increase petrol duty to get it back again – net result is the price of petrol is not affected by a VAT reduction.

All in all – these politicians are a useless bunch of morons that have no right to govern. We should get rid of the lot of them and get someone honest and trustworthy like Lorraine, Ben, Kate, Andrew and Fiona to lead the country. 😕

[John Thomson]

quote Phill:

We should get rid of the lot of them and get someone honest and trustworthy like Lorraine, Ben, Kate, Andrew and Fiona to lead the country. 😕

are they a pop group?

john

[Phill Fenton]

Not forgetting Claire, Andrea and Phil and Fern of course :lol1:

[Kevin Flowers]

and whats the betting when VAT goes back up the duty stays put

Kev

[Peter Normington]

quote Kevin Flowers:

and whats the betting when VAT goes back up the duty stays put

Kev

Whats the betting it will return @ 20%

😀

Peter

[Lynn Normington]

how about all us like minded go and buy an island and live in perfect Harmony 😥 no one will need to buy cause we can all do it ourselves 🙄 sorry I’m off now

Lynn

[John Childs]

quote Peter Normington:

sorry can someone explain more simply?

I thought I had. 😀

Whatever VAT you pay, you claim back. Zero sum.
Whatever VAT you charge, you hand over. Zero sum.
The actual rates at any given time are immaterial.

Come on Peter. Surely you can remember the time when we had two standard rates of VAT concurrently. As I recall, 8% on some stuff, and 12.5% on what the government decreed were "luxury" goods.

[Peter Normington]

sorry John,
I meant explain more simply for David M, I tried but he still could not "get his head around it,

Peter

[Paul S Martin]

HI Ya

For me this vat rate change is one big pain, More work re pricing all my goods in store and then 12mth’s later do it all again.

God knows what vat rate we will have then.

Bring Back Common Sense.

We should have a Bet running on the vat Rate to come I cant see it coming back to good old 17.5%

Paul

[Hugh Potter]

i reckon 20% or even 22%, robbing gits will leave the country in as bad a state as possible, won’t they? surely then, when they’re in their rightful "opposition" place on the benches, they can tell the country just how bad the next gov’t are doing things and that nly they can sort it out.

i said when blair got in that it’d all end in tears. does that make me a prophet? (guess there’s a joke there somewhere about profit but i can’t think of it!). my heart truly sank when i vaguely recalled the late 70’s!

i had one of my wholesalers call me today, asking if i were reducing the cost of my products they stock 😮 errrr… no. i don’t recall increasing it with each of the 5% increases in the past two years, nor because my utility bills are up 40%, nor because petrol is up 25% at a minimum.

"that’s fine.. just checking" was the response, "we’re not altering pricing either as the catalogue has only just been printed."

personally i welcome the opportunity to increase my profit, i’ll get a whopping 1.5p extra per item on my wholesale, 2.75p on trade, and 5p on retail. this time next year rodders…. yeah right!

thing is, (this is an edit btw), i have enough cut stock and enough sheet material to keep me going for another 4-5 months anyways, only the exceptionally big orders will see me buying in specifically for that order. so barring the big orders, maybe once every two months, i’ll be using stock which cost me 17.5% anyway.

[Gavin MacMillan]

Ok I’m confuzled!

you buy stuff today and it cost £100 – you get back £17.50

you sell tomorrow @ £200 – you have to give back £35.00

you sell same thing next week @ £200 – you give back £30.00

I’m probably wrong but do we not make money on anything in stock? Should we not buy buy buy and then next week sell sell sell?

Someone explain…. even simpler than Johns! 😀

[John Gregson]

The vat part is never your money you buy with vat at 17.5% and you sell with vat at 17.5%. The vat part goes to the vat man – its never yours.

You buy in at 15% and sell a 15% is the same.

Its just the same but different :lol1:

Gavin – your example of the £200 – its still £200 because the vat is never yours to keep

[Hugh Potter]

quote Gavin MacMillan:

Ok I’m confuzled!

you buy stuff today and it cost £100 – you get back £17.50

you sell tomorrow @ £200 – you have to give back £35.00

you sell same thing next week @ £200 – you give back £30.00

I’m probably wrong but do we not make money on anything in stock? Should we not buy buy buy and then next week sell sell sell?

Someone explain…. even simpler than Johns! 😀

it will only help you to buy buy buy, when the 15% kicks in, and if you’re not vat reg’d. however, if you’ve the turnover to simply buy buy buy then you’re probably already vat reg’d.

as for vat…

vat in £100 is only £14.90, vat on £100 is £17.50. i hope you’ve not been paying them too much!

[Shaun Harris]

quote John Childs:

quote Peter Normington:

sorry can someone explain more simply?

I thought I had. 😀

Whatever VAT you pay, you claim back. Zero sum.
Whatever VAT you charge, you hand over. Zero sum.
The actual rates at any given time are immaterial.

Come on Peter. Surely you can remember the time when we had two standard rates of VAT concurrently. As I recall, 8% on some stuff, and 12.5% on what the government decreed were “luxury” goods.

Here it is in simple terms

We collect the taxes free of charge and send it to the government.
No matter what the rate

[Gavin MacMillan]

quote :

i hope you’ve not been paying them too much!

All prices are plus VAT unless otherwise stated! 😀

[Richard Urquhart]

Not sure how it will really effect me but my biggest worry was making changes to the accounts software, opened my sage accounts this morning with a live feed from sage explaining how to make the simple changes to the standard rate and change to the new 15% as from Monday. Fantastic service from Sage

Rich thought it was going to be a big pain in the butt !!!!!

[John Childs]

Hello Rich. I trust that you are well.

The thing is that we have been spoiled in so far as the standard rate hasn’t changed for about twenty years, so nobody has had to worry about it.

Prior to that there were regular changes and it wasn’t a problem then, even before we all started doing accounts on computers. Should be even easier now. 😛

Outgoing invoices are no problem – the accounts package will take care of that automatically. The only thing we will have to watch is incomings where, for a few weeks, we will be receiving a mix of invoices at the old rate, and ones at the new, depending on the date of supply. It is easy enough to enter them manually though, and that aspect will soon go away.

[John Childs]

Taking this beyond the issue of VAT though, I have found that, far from being a tax cutting budget it is, in fact, on the whole, going to cost me an awful lot of money. More stealth taxes.

I’m not a happy bunny. :drama:

[Phill Fenton]

Shame – but here’s a happy song to cheer everyone up:- 😀
http://uk.youtube.com/watch?v=oIP-BPzuI6I&feature=related

[Nicola McIntosh]

nice choice phil 😉

nik

[Lynn Normington]

raised duty on fuel cigs and booze who is he aiming for 🙄 us

Lynn

[Ali Osman]

quote John Childs:

quote Peter Normington:

sorry can someone explain more simply?

I thought I had. 😀

Whatever VAT you pay, you claim back. Zero sum.
Whatever VAT you charge, you hand over. Zero sum.
The actual rates at any given time are immaterial.

Not true..you are not allowed to claim back full VAT on your petrol/diesel on your work vehicles, you should be deducting £63.45 (per 3 months) as a fuel scale charge from the VAT you are re-claiming back.. VAT is so damn easy I cannot see what everyone is getting confused about?

If you’re in business you should be VAT registered..no excuses!

[Chris Wool]

so forget going back to 17.5% try 18.5% 😮

[Peter Normington]

quote Chris Wool:

so forget going back to 17.5% try 18.5% 😮

news tonight says 21% just after the next election.

Peter

[Peter Normington]

quote Ali Osman:

quote John Childs:

quote Peter Normington:

sorry can someone explain more simply?

I thought I had. 😀

Whatever VAT you pay, you claim back. Zero sum.
Whatever VAT you charge, you hand over. Zero sum.
The actual rates at any given time are immaterial.

Not true..you are not allowed to claim back full VAT on your petrol/diesel on your work vehicles, you should be deducting £63.45 (per 3 months) as a fuel scale charge from the VAT you are re-claiming back.. VAT is so damn easy I cannot see what everyone is getting confused about?

If you’re in business you should be VAT registered..no excuses!

If vat is so simple somone should have told you you can claim the full ammount of vat back on fuel used for business

I hope eddie stobart doesnt take your advise, one of his trucks will be using something in excess of a grand a week on fuel
Peter 😀

[Hugh Potter]

quote Ali Osman:

If you’re in business you should be VAT registered..no excuses!

why is that then?

for the kind of turnover i have, i’m not even close to the vat threshold. i normally earn enough to live on, and that does me fine. why should i have the extra worry of being an unpaid tax collector?

[Phill Fenton]

It depends on who you are selling to Hugh. If it’s mainly VAT registered businesses then it can make sense to become VAT registered since your customers will be claiming back all of the VAT you charge. You in turn can claim back the VAT on most of your overheads (materials costs and fuel etc.).
If your main customers are the general public it’s a different story of course.

[Peter Normington]

I sort of agree with Ali, that all business should be vat registered,
My reason is there are to many cowboys (not you Hugh or anyone in particular) in general terms, in this industry doing "cash jobs" they are doing what a lot of us complain about, that is bringing down standards, and on top of that, getting away without paying any form of tax. so yes from that standpoint, i think it would be better for ALL self employed to have some sort of regulation as to how they invoice and pay tax.
Ok maybe a bit idealistic, but at least if you are registered for vat, or even just a business, it would level the playing field a bit.

Peter

[Peter Normington]

quote Phill:

It depends on who you are selling to Hugh. If it’s mainly VAT registered businesses then it can make sense to become VAT registered since your customers will be claiming back all of the VAT you charge. You in turn can claim back the VAT on most of your overheads (materials costs and fuel etc.).
If your main customers are the general public it’s a different story of course.

if you apply the 5 times rule to calculating costs,

Hugh pays 117.50 for goods so retails at @ £587.50 and gets to keep £470
if vat registered you pay £100 and retail for £587..50 and get to keep £500

so by being unregistered, you are making £30 quid less

Does that make sense?

peter

[John Childs]

quote Ali Osman:

quote John Childs:

quote Peter Normington:

sorry can someone explain more simply?

I thought I had. 😀

Whatever VAT you pay, you claim back. Zero sum.
Whatever VAT you charge, you hand over. Zero sum.
The actual rates at any given time are immaterial.

Not true..you are not allowed to claim back full VAT on your petrol/diesel on your work vehicles, you should be deducting £63.45 (per 3 months) as a fuel scale charge from the VAT you are re-claiming back.

Sorry Ali. I don’t understand your post.

You are talking about tax on fuel for personal use which naturally you should pay out of your own pocket because you are the consumer there, and it has nothing to do with the business.

There are several ways you can address that, logging personal mileage and paying for it yourself, or not using company vehicles for personal use at all. The fact that you use the fuel scale charge method for convenience doesn’t alter the fact that all VAT charged on genuine business expenses is fully reclaimable.

I agree with you that VAT is easy and that the admin aspect shouldn’t put anyone off registering but, as for everybody being registered, I’m not so sure. Whether we agree with the rules or not, the fact is that they are in place. It is a generally accepted principle that no-one has the obligation to let the taxman dig any deeper into their pockets than absolutely necessary, so I think that we are all entitled to use the rules to our own benefit.

[Phill Fenton]

quote Peter Normington:

if you apply the 5 times rule to calculating costs,

Hugh pays 117.50 for goods so retails at @ £587.50 and gets to keep £470
if vat registered you pay £100 and retail for £587..50 and get to keep £500

so by being unregistered, you are making £30 quid less

Does that make sense?

peter

Nope – in that example the non VAT registered trader actually pays out 117.50 in materials and sells for £587.50 – so makes a profit of £470

The VAT registerred trader gets to keep £500 but has to pay back the VAT difference (£87.50 – £17.50) so is actually only making a profit of £430

[Gavin MacMillan]

I’m sure this is being made more confusing than it needs to be…. Phill are your maths right there?

[Graeme Harrold]

Think of it without VAT……….

Non registered
Stock purchased £117.5 sell at £587.5………Profit £470

Vat Registered (Without VAT)
Stock purchased £100 sell at £500………Profit £400

VAT Registered (with VAT)
Stock purchased £117.5 (£17.50 VAT) Sell at £587.5(£87.50 VAT)………VAT Liability £70 (£87.50-£17.50)….Profit £400 😥

Think it makes sense this time

Basically VAT registered will make this difference back on other goods and services purchased that are in support of the business……….

[Hugh Potter]

quote Phill:

quote Peter Normington:

if you apply the 5 times rule to calculating costs,

Hugh pays 117.50 for goods so retails at @ £587.50 and gets to keep £470
if vat registered you pay £100 and retail for £587..50 and get to keep £500

so by being unregistered, you are making £30 quid less

Does that make sense?

peter

Nope – in that example the non VAT registered trader actually pays out 117.50 in materials and sells for £587.50 – so makes a profit of £470

The VAT registerred trader gets to keep £500 but has to pay back the VAT difference (£87.50 – £17.50) so is actually only making a profit of £430

that’s more like it! couldn’t get my head around Peters example!

only thing is, while i might make a little more on a job, i am unable to reclaim vat for a great many things which you can, petrol, stationary, consumables, etc etc. i would bet at the end of the year it’s prob in your favour.

i’ll speak to my accountant about vat reg and whether it’s worth me doing it, i considered it a short while ago when i was looking at getting a van, but the banks wouldn’t lend so i didn’t pursue it. . most of my customers are small businesses, sole traders in many cases, many aren’t vat reg’d so it’d make little difference to me or them.i think only twice in 4yrs have i been asked if i’m vat reg’d, both fairly big companies, both of whom still use me today!

[Graeme Harrold]

Hugh, Im in the same boat as you, work from home (all be it part time) and have my fingers in a few ventures. Im not VAT registered, but am now considering getting registered for 2009/2010 or sooner as 75% of my customers are VAT registered. Just got to see the accountant to advise on simple or full registration.

[Alan Drury]

I registered for VAT voluntarily in 1988 and I have to say it is one of the best things I did. The bookkeeping is not hard and if you run something like Quickbooks it is a doddle. It is important that you keep the VAT charged available for paying at the end of the quarter as the VAT people take no prisoners, As for the VAT changes coming in on Monday – I do not expect them to make a jot of difference to me or the majority but the future changes made when the money has to be paid back I think are going to hurt – ALOT.
Alan D

[Peter Normington]

Sorry the battery in my calculator was low 🙁
corrected figures are:-

non vat reg
Pays for goods inc vat 117.5
sells at (x5) 587.5
gross profit (587.5- 117.5) 470

Vat reg
Pays for goods net 100
sells (x5 +vat) 587.5

Gross profit (587.5 -100-vat) 400

as phil says

On my way to the corner 😳 Peter

[Graeme Harrold]

quote Peter Normington:

Sorry the battery in my calculator was low 🙁
corrected figures are:-

Smarter than a 10 year old eh?????

You just copied me without reference………that’s plagiarism 😮

:lol1: :lol1:

[David Lowery]

BREAKING NEWS

PoundLand will close tonight in various locations throughout England and the staff will work through the night adjusting all the prices to take account of announced V.A.T. reduction it will open as usual in the morning but will then be called the 97.872348 PenceLand shop!

[Graeme Harrold]

quote Dave n Rob Lowery:

BREAKING NEWS

PoundLand will close tonight in various locations throughout England and the staff will work through the night adjusting all the prices to take account of announced V.A.T. reduction it will open as usual in the morning but will then be called the 97.872348 PenceLand shop!

:lol1: :lol1: :lol1: :lol1:

If I was a small trader I wouldnt change a thing price wise, and just discount at the till by 1.5 – 2%

[Steve Morgan]

quote Chris Dowd:

The BIG question is…… are HMRC going to write to every one who is VAT registered and tell them officially that the rate will change next Monday?

I doubt it very much!

My letter from HMRC has arrived in this mornings post.
Biggest problem I can see is remembering the fraction to use for calculating VAT in an inclusive price – it has been 7/47 – easy ‘cos that’s an aeroplane, the new fraction is 3/23, what’s a 3/23? nothing comes to mind at the moment
On the subject of making money out of VAT. I used to earn quite a lot annually in the late 80’s because I ran a high interest deposit account where all VAT was transferred, immediately money was paid in, high inflation went hand in hand with high interest rates then unlike today so it’s probably no longer worth doing.

Steve

[Ian Johnston]

quote Steve Morgan:

My letter from HMRC has arrived in this mornings post.
Biggest problem I can see is remembering the fraction to use for calculating VAT in an inclusive price – it has been 7/47 – easy ‘cos that’s an aeroplane, the new fraction is 3/23, what’s a 3/23? nothing comes to mind at the moment
On the subject of making money out of VAT. I used to earn quite a lot annually in the late 80’s because I ran a high interest deposit account where all VAT was transferred, immediately money was paid in, high inflation went hand in hand with high interest rates then unlike today so it’s probably no longer worth doing.

Steve

a 323 is a mazda car

[Steve Morgan]

Well done Ian, had hoped for something more exciting, still it was a WRC winning car many years ago driven Timo Salonen I think.

Steve

[Hugh Potter]

quote Steve Morgan:

quote Chris Dowd:

The BIG question is…… are HMRC going to write to every one who is VAT registered and tell them officially that the rate will change next Monday?

I doubt it very much!

My letter from HMRC has arrived in this mornings post.
Biggest problem I can see is remembering the fraction to use for calculating VAT in an inclusive price – it has been 7/47 – easy ‘cos that’s an aeroplane, the new fraction is 3/23, what’s a 3/23? nothing comes to mind at the moment
On the subject of making money out of VAT. I used to earn quite a lot annually in the late 80’s because I ran a high interest deposit account where all VAT was transferred, immediately money was paid in, high inflation went hand in hand with high interest rates then unlike today so it’s probably no longer worth doing.

Steve

what the heck do those fractions mean? lol.

to know the vat to add, simply multiply the non vat figure by 1.175

to find the vat in a vat incl price, divide by 1.175.

with the reduced rate simple multiply or divide by 1.15.

job jobbed!

[Phill Fenton]

I do wot Hugh said 😀

The good news is that anyone on the flat rate scheme will find their rate has been reduced from 8.5% of turnover to 7.5% of turnover which answers my earlier question

[David Lowery]

FFS….The easiest way is to use the easyvat in the new toolbar. Enter the vat rate at 15% then the price per unit then it will give you the vat total….stuff all this divisionery stuff :lol1:

[Hugh Potter]

quote Dave n Rob Lowery:

FFS….The easiest way is to use the easyvat in the new toolbar. Enter the vat rate at 15% then the price per unit then it will give you the vat total….stuff all this divisionery stuff :lol1:

lol,

one of my first jobs was working in a heavyside builders yard, eventually running it some years later, however, we didn’t have fancy tools, there wasn’t even a computer, the accountant still used legers! ##very often when busy there wouldn’t be enough calcultors around, so you had to do the vat in your head,

the simply way on 17.5% was take 10%, ad 1/2 of that, and half again.

with 15% simply take 10%, half it, and add the two together! takes seconds, alot cheaper than a piece of over priced software!

not that i need worry about vat anyways!

[Steve Morgan]

what the heck do those fractions mean?

Just one of those numbers I remember, I thought it was easier than 1.175
I rarely use it and hardley ever need to calculate VAT anyway, the software does that.
Steve

[Derek Heron]

i run this one

http://www.digita.com/taxcentral/home/v … efault.asp

derek

[Paul Hughes]

I had my letter from VAT man about the new rate this morning.

just i thought, but what has it cost to send all these letters out? how many VAT registered business are there?, there are alot of business in our area phone book alone 😮

which then leads me on to how dam quick they have got that number of letters printed and in the post 😮 😮

for me to get it this morning it was posted last night, which is one day after the announcement. that’s quick
😀

I just be happy if people paid there bills at present be it at 15% or 17.5% (!)

paul

[Shaun Harris]

Also received one this morning.

But I received a copy of the same from my accountant yesterday by email

[Graeme Harrold]

quote Hugh Potter:

what the heck do those fractions mean? lol.

to know the vat to add, simply multiply the non vat figure by 1.175

to find the vat in a vat incl price, divide by 1.175.

with the reduced rate simple multiply or divide by 1.15.

job jobbed!

Unfortunately not so simple Hugh……..You would be selling yourself short if you did that.

Example

£100 plus 10% is £110……..If you then take off 10% (£11) you only have £99 hence the need for simple fractions to reduce the inclusive price back to cost. :lol1: :lol1:

Add vat multiply by 1.15, and to find the vat multiply by 0.15.

To find the VAT in an inclusive price, multiply it buy 0.13

[P A Davenport]

I think we should get Mr Branson to run the country – give him a cut of what ever profits it makes and let him loose – you know a sucessfull business man running the country instead of a bunch of flaming muppets..
(:) (:)

[Shaun Harris]

quote Graeme Harrold:

quote Hugh Potter:

what the heck do those fractions mean? lol.

to know the vat to add, simply multiply the non vat figure by 1.175

to find the vat in a vat incl price, divide by 1.175.

with the reduced rate simple multiply or divide by 1.15.

job jobbed!

Unfortunately not so simple Hugh……..You would be selling yourself short if you did that.

Example

£100 plus 10% is £110……..If you then take off 10% (£11) you only have £99 hence the need for simple fractions to reduce the inclusive price back to cost. :lol1: :lol1:

Add vat multiply by 1.15, and to find the vat multiply by 0.15.

To find the VAT in an inclusive price, multiply it buy 0.13

Graeme

Hugh is correct he is multiplying and dividing by the same figure, what you are saying is wrong is adding a percentage (a fraction) then taking away a percentage of the new number. You are correct in saying this doesn’t work but that is not what Hugh has said to do..
However someone else earlier on this thread did suggest the percentage thing.
Another way of working out the VAT on something at 17.5% is multiply by 7 divide by 47.

[Paul S Martin]

Hi All

Maybe this will help to work out the the charge for goods sold inc vat

From 17.5% as was charged to 15% Vat to be charged from Monday 1st Dec

Link Below if it helps you pass it on.

http://rapidshare.com/files/168147007/V … 1.xls.html

Hope it helps
Paul

[Shaun Harris]

Dragging this discussion back up.

It didn’t really work did it there was a 2.5% reduction which made very little impact especially for those of us who are VAT registered.

This morning I (as I’m sure many of you have) have received a letter from a very well known supplier explaining how the weakness in the pound has forced up prices and there will be increases between 3%-5% on some products.

And I’m sure they will not be the last to send out these letters.