VAT question for other CDCs
- Thread starter Coley
- Start date
Isobel1965
Gold Member
Oh I do keep very detailed records of what my clients order etc - and did try to keep a regular stockcheck but it changes so dang fast that I couldn't keep up.
I haven't got that kind of brain, I'm afraid. So don't listen to me - you keep doing it the way you are, hun. I'll be the one panicking when it's the day of judgement lol!
I haven't got that kind of brain, I'm afraid. So don't listen to me - you keep doing it the way you are, hun. I'll be the one panicking when it's the day of judgement lol!
Not anal!! I would get into such a tizz with ordering if i didn't keep it all on the pc! I put in their orders each week and can print their receipt from that - but then i run a report which tells me what i need to order from cambridge (as i get the client orders in advance). That way if i haven't had their order i can cut and paste their previous so i know i've got enough stock. Believe me otherwise i'd never have enough!
Isobel1965
Gold Member
I tend to over-order on everything, so that I can accomodate any requirements. It's bluddy expensive though lol.
Serves me right for not keeping a proper stock check though!
Serves me right for not keeping a proper stock check though!
clairejen
Lurker
Hi, I'm totally new here and hope you don't mind me posting. I'm not a CDC but I do accounts and VAT returns so the figures make a lot of sense to me. That formula of 7/47 is to calculate the VAT on a VAT inclusive figure, if you work it out and take off the VAT you can check it back by multiplying the net figure by 17.5%. Hope that makes sense.
Coley
Re-starter
Yeah..the 7/47 thing gives me a different answer to the 17.5% that I work out! We're talking only something that costs a fiver, the difference is 50p odd out using the 7/47 in comparison to multiplying the figure by 0.175 to get the VAT. I don't understand how on earth they get that 7/47 thing. Any ideas?
Hi clairejen,
Welcome to MiniMins!!!
Lovely to have an accountant with us
Love Mini xxx
tashy100
Member
Hi Nicole
The 7/47 can only be used on the figure that INCLUDES the VAT eg something costs 117.50 x7/47 =17.50 worth of VAT.
The 17.5% is to work out the VAT on a figure that is NET of VAT eg you buy something that costs 100 BEFORE VAT x17.5% = 17.50 worth of VAT.
However - dont know why you need to even think about VAT because you only need to account for it if your turnover is over 59,000 (might now be 60,000)
Hope this helps
Tasha
clairejen
Lurker
Hi, thanks for the welcome Mini.
Coley, its one of those simplified fraction things, the original sum is 17.50/117.50, ie the VAT amount divided by the total amount. But this is considered cumbersome (don't ask me why, few people work these sums out in their heads and if they do they should get a life) so both side of the fraction are divided by 2.50 giving 7/47. Bet you wish you hadn't asked .
Coley, its one of those simplified fraction things, the original sum is 17.50/117.50, ie the VAT amount divided by the total amount. But this is considered cumbersome (don't ask me why, few people work these sums out in their heads and if they do they should get a life) so both side of the fraction are divided by 2.50 giving 7/47. Bet you wish you hadn't asked
.
Kate
CDC/PT/PITA
Hiya Coley
Can you give us an example where it's not working?
The easiest way to describe it is using a nice round figure like 100. Let's say your total figure is 117.50, which is 100 plus VAT.
So you put 117.5 in column G and the spreadsheet divides it by 7/47 - that gives you 17.5 which is your VAT. However, if you use the net price (that's the price excluding VAT) and only put "100" in column G, the figure you'll get will only be 14.89 (because 85.11 plus 14.89 VAT = 100 gross).
Basically, you have to put the gross figure in column G which is the total inc VAT, not the net figure, which is the total excluding VAT (although as others have said, unless you're VAT registered then the value of the VAT doesn't matter, even in terms of your self assessment tax return - it's a different tax altogether).
Could that be where it's going wrong?
Edited to add: give us the exact figures and we can probably work out where the problem is
Can you give us an example where it's not working?
The easiest way to describe it is using a nice round figure like 100. Let's say your total figure is 117.50, which is 100 plus VAT.
So you put 117.5 in column G and the spreadsheet divides it by 7/47 - that gives you 17.5 which is your VAT. However, if you use the net price (that's the price excluding VAT) and only put "100" in column G, the figure you'll get will only be 14.89 (because 85.11 plus 14.89 VAT = 100 gross).
Basically, you have to put the gross figure in column G which is the total inc VAT, not the net figure, which is the total excluding VAT (although as others have said, unless you're VAT registered then the value of the VAT doesn't matter, even in terms of your self assessment tax return - it's a different tax altogether).
Could that be where it's going wrong?
Edited to add: give us the exact figures and we can probably work out where the problem is
Last edited:
Coley
Re-starter
Right.....so Cambridge charge us VAT on the items that need to be charged for VAT......they know this....but they give us the cd with their spreadsheet on it with the wrong calculation on it!!! eg. I bought drink mixes totalling 30.64 this week. According to my invoice for this, the VAT should be £5.36. If I was using the 7/47 formula I get £4.56 VAT which is incorrect.
Whats up with that!!?
Whats up with that!!?
clairejen
Lurker
If the total that you pay is £30.64 and it includes VAT then your calculation of £4.56 VAT is correct. If the total payment is £36.00 then the VAT is £5.36 and the net amount (before VAT was added) is £30.64.
So if they have only charged you £30.64 and said that the VAT included in that amount is £5.36 it is their mistake.
So if they have only charged you £30.64 and said that the VAT included in that amount is £5.36 it is their mistake.
Kate
CDC/PT/PITA
Hiya Coley
If you look at your invoice from Cambridge, the figure of £30.64 doesn't actually include the VAT. So you have to add the VAT (£5.36) to get the gross figure which is £36.00. £36.00 should be the figure you put in column G on your spreadsheet. If you do that you will see that the calculation is correct.
The figure that goes in column G should be the total that you spent, including the VAT (I'm guessing that you input it directly into column G as I don't have the spreadsheet - I'm just basing it on the formula you posted). Unfortunately because the item total on the invoices does not include the VAT (except at the very bottom of the invoice in the totals) you have to add it on manually to get the gross figure. To be honest I think it would help if the invoice had an "inc VAT" column and an "ex VAT" column to avoid this sort of confusion.
So to recap:
Gross: £36.00 (this figure goes in column G)
Net: £30.54 (this is the total shown on your Cambridge invoice)
VAT: £5.46 (if you put the Gross amount in column G you will see that the spreadsheet will correctly calculate this)
If you want to double check it, the Gross figure minus the VAT figure will always give you the Net figure.
If you look at your invoice from Cambridge, the figure of £30.64 doesn't actually include the VAT. So you have to add the VAT (£5.36) to get the gross figure which is £36.00. £36.00 should be the figure you put in column G on your spreadsheet. If you do that you will see that the calculation is correct.
The figure that goes in column G should be the total that you spent, including the VAT (I'm guessing that you input it directly into column G as I don't have the spreadsheet - I'm just basing it on the formula you posted). Unfortunately because the item total on the invoices does not include the VAT (except at the very bottom of the invoice in the totals) you have to add it on manually to get the gross figure. To be honest I think it would help if the invoice had an "inc VAT" column and an "ex VAT" column to avoid this sort of confusion.
So to recap:
Gross: £36.00 (this figure goes in column G)
Net: £30.54 (this is the total shown on your Cambridge invoice)
VAT: £5.46 (if you put the Gross amount in column G you will see that the spreadsheet will correctly calculate this)
If you want to double check it, the Gross figure minus the VAT figure will always give you the Net figure.
Coley
Re-starter
Right....soooo....they have all the amounts then at the end they have the goods total, plus the VAT...aaaargh!!! how the heck does this work? SO this £30.64 should really be £36 because thats what I was actually charged in the very end eventhough they said the amount is 30.64? and then the VAT should be £5.36 as they say.....yes? They don't make things easy do they? so the amounts are not with VAT and the VAT is added on at the end...so the flippin 7/47 thingie was right in the first place?? But when I put £36 in the gross column I only get £3.06 in VAT. Is that right?
So without VAT the items are 30.64 and with VAT they are£36? surely that means my VAT should come it £5.36 and not £3.06??
So without VAT the items are 30.64 and with VAT they are£36? surely that means my VAT should come it £5.36 and not £3.06??
Kate
CDC/PT/PITA
Yup, the VAT should be £5.36. You haven't changed the formula, have you? Because 3.06 is 10% of the net instead of 17.5%. Can you copy and paste the formula from that cell in the spreadsheet, same as you did before? The previous calculation, where you put in "30.54" as the gross figure and it calculated the VAT as "4.56" shows it was working then (because if the gross figure had been 30.54 then the net would have been 25.99 and the VAT 4.55), so something must have changed.
Coley
Re-starter
Right...this 4/47 thing never EVER gave me £5.36 VAT. I did change it over from the 4/47 and changed it to 0.175 and I got £6.30 once I changed the gross amount to £36. aaaaaaargh!!! it now says =IF(I13="y",H13*4/47,0) and gives me £3.06!!! (when the gross is £36) and I don't get it and I don't understand why nothing works out!!
I'm going to have to sign off for a bit, off to Glasgow soon to see bf and he has no net access so sorry if I don't reply! this is driving me mental though. Nothing apart from putting 30.64 and using the 0.175 formula gives me the £5.36 VAT.
I'm going to have to sign off for a bit, off to Glasgow soon to see bf and he has no net access so sorry if I don't reply! this is driving me mental though. Nothing apart from putting 30.64 and using the 0.175 formula gives me the £5.36 VAT.
Shrinking Nicky
Cambridge Diet Counsellor
Slighlty off topic - many years ago I used to work in a firm of Chartered accountants & we used to have a lot of farmers as clients. A lot of their sales were zero rated or exempt (a bit like us with food products) but a lot of their purchases were vatable (we are similar with some of our purchases - eg stationery, if we bought scales etc, if we get printer cartridges etc etc) & what this meant was they always got money back from the revenue.
I have not looked into it - as my business is very new, but I am sure I remember the VAT limit being where you HAD to register, but you could opt to register before this limit, poss worth looking into if it would mean you getting a figure back that would make a material difference to you....& if you do look into it let the rest of us know!!!
Also - to all you oldies (& I mean those that have been doing CD for a couple of years or more not your age) what do you put in your accounts fpr things like use of room as office, telephone, car useage etc???
Thanks
Nicky
CDC Swindon
I have not looked into it - as my business is very new, but I am sure I remember the VAT limit being where you HAD to register, but you could opt to register before this limit, poss worth looking into if it would mean you getting a figure back that would make a material difference to you....& if you do look into it let the rest of us know!!!
Also - to all you oldies (& I mean those that have been doing CD for a couple of years or more not your age) what do you put in your accounts fpr things like use of room as office, telephone, car useage etc???
Thanks
Nicky
CDC Swindon
