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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15843
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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acording to : According to the VAT Law, taxpayers have the

Resolved Question:

acording to : According to the VAT Law, taxpayers have the right to reduce their
amount of output VAT (i.e. the VAT charged by the taxpayer on the
sale of goods or services) by the amount of input VAT charged on
the acquisition of goods and services. The reduction can be made
exclusively by the amount of input VAT charged on the purchases
relating to VAT-able sales.
on sales gross 20 GBP and cost nett 12.34
we can reduce vat payed to revenue : output vat 4gbp-inputVat 2.47gbp = 1.53 gbp
Submitted: 2 years ago.
Category: Tax
Expert:  TonyTax replied 2 years ago.
Hi.

Can you tell me exactly what you need to know please. Is your business VAT registered in the standard scheme as opposed to the flat rate scheme? Do you run your business through a limited company or a solde trader or a partnership? Have you only recently registered for VAT?
Customer: replied 2 years ago.

standart scheme , limited company, we trading many years, this answer will just help with discussion between owners , and i just need neutral opinion, not from our accounting person

Expert:  TonyTax replied 2 years ago.
Thanks.

Leave this with me while I draft my answer.
Expert:  TonyTax replied 2 years ago.
Hi again.

A company that is VAT registered is simply an unpaid tax collector for the government. The VAT a company collects never belongs to the company. It is a tax on the buyer of the good or service.

If your company sells a VATable service or VATable goods to a customer, it will add VAT at 20% to the sale price so a good or service that has a sale price of £1,000 will have £200 of VAT added and the customer will pay £1,200 to your company.

If your company pays £400 for a VATable service or goods and the seller is VAT registered, VAT of £80 will be added to the purchase price and your company will pay £480 for the good or service to the supplier.

When your company completes its VAT return, the £80 input VAT it has paid its supplier will be deducted from the £200 output VAT it has collected from its customer and the difference of £120 will be paid to HM Revenue & Customs. In net terms, the company will be square.

It works in reverse. If your company's input VAT exceeds its output VAT, it will receive a repayment of the difference from HM Revenue & Customs. It will then be square.

Your understanding of the rules is correct. Take a look here for some more examples.

I hope this helps but let me know if you have any further questions.
Customer: replied 2 years ago.

thank you for this .

thats only confirm i was no mistaken

Regards

Expert:  TonyTax replied 2 years ago.
Thanks.
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15843
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
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