Registering for VAT

[David Horgan 564]

1 hour ago, johny1980 said:

Thanks so whats the difference between 'qualifying' and 'non qualifying' as there is examples of 20% and 16.67% there?

Qualifying means its previously been owned by a Company who claimed the VAT when purchased and paid it back when it was sold . This means that if the next trader eg us were selling it to another VAT business we could produce a VAT invoice and the new customer could then claim it back . 

If we sold the car to a private customer it returns as a Margin car and the VAT element is inside the profit 

Non qualifying means its a margin vat sales 

there is no such thing as a16.5% VAT rate at all 

Your confusing 16.5 % as VAT within the workings out regards the eg £100 including vat , Divided buy 1.2 = £166 as the Margin VAT , its never worked out as 16.5 % as i know it . 

EG if at end of quarter your gross profit is £40,000 then the MARGIN VAT = 40,000 divide 1.2 = £6,667 VAT , Leaving you £33,333 profit . But you can claim all paid VAT back in that quarter too so it will be different every time 

Edited January 8, 2021 by David Horgan

[BHM 994]

 Someone who can’t understand basic mathematics is probably well advised to employ a bookkeeper.