VAT, quotes, and invoices

Hi again all

So I've due my 1st week :) gone well so far

This may sound like a silly questing regards invoicing

If I quote someone 50, should the invoice be 50+20% therefore £60?

Well only if you are vat registered

Yep I am....

That's what you have to do then.

I think you should speak to an accountant. If you are already VAT registered and don't know what to do then you have a rather serious problem.

David Cameron needs all the vat he can get, because we are in as mess!

It is an odd question but to answer it, are you talking about when you quote on an exchange site or when you're answering a call to one of your customers?

On exchange sites saying "£50" is all a vendor wants to know, whether you're vat registered or not doesn't affect that...we all assume you mean before vat is added, if its applicable.

If you're giving a quote to a customer then say "£50 plus Vat"

I do know of one newbie who DID include vat to their Exchange site quote, didn't realise not to, and not surprisingly was not getting their quotes accepted....so maybe not such an odd question after all

Exactly as Rob has just said.

If you are VAT registered then when and how you charge VAT can change depending on a few different factors.

As I said earlier, if you are not aware of this then you really should speak to an accountant.

(Before you get yourself into a whole world of trouble.)

Yep don't dick around with customs and excise they don't take prisoners!! get yourself a book keeper NOW before you get too far in other wise it will cost a fortune to tidy it all up afterwards, We (the we being my other half!) use quickbooks 2012 which has a usefull tool that works out your vat and submits your returns online at a click of a mouse, all invoices and POD's are sent on the day of delivery via email and hard copies posted second class, Michelle spends around half an hour a day just keeping things up together. one thing I have learned over the years it is dead easy to get in a mess and it takes twice as much time and money to sort it out, apart from that if you not on top of the books how do you know your not making a loss?

It was an easy question. Are CX prices Vat inclusive or plus Vat. And no clear answer.

As CX and MTVan are made up of both VAT registered and non registered drivers, all quotes given are excluding vat.

I have to say though, that although i don't mind helpin anyone who has a question, some of the questions we're getting lately are getting more and more like "stating the bleedin obvious".

Thank you.

you always quote - the VAT unless its joe bloggs down the road

but i would have thought you would have done all this in your business plan?

The question never mentioned cx.

you should always quote the VAT whoever you are doing the job for, customs and excise tend to get a little excited if you don't and as they do VAT related stuff all day long they are pretty good at catching people out! you may think you are doing 'joe bloggs' a favour by doing it 'cash' but if you get caught then it's you that pays the fine etc

Yes wise word from Mr Springer but again its your fault if you are foolish enough to try to defraud the revenue This again is shameful, sham a pigs dinner 10 hours later People in business should not be asking these sorts of questions ,You should know this stuff before you hit this point . It highlights the unskilled and amaturish nature of exchange sites Since I have embraced the internet as advised by my kids I see a whole new side to this industry that I never thought was possible !! Yes there are some good old boys on here proper old school as they like to say and I love talking to them but Im also wondering why these old boys dont just tell them where to go !! They actully entertain this BS !!! You people are not doing jobs working for somebody you are running a business and I dont drink during the day but sometimes ...............you lot ................

Speed Couriers (Stansted Airport) said:

I have to say though, that although i don't mind helpin anyone who has a question, some of the questions we're getting lately are getting more and more like "stating the bleedin obvious".

At no point that i can see, was anyone talking about defrauding the revenue. What was being asked was whether when VAT registered, when quoting for a job should they say "that's £50 PLUS vat" or " that's £60". He wanted to be clear what was the norm.

Quoting:

If you are quoting a courier company or direct business client of your own then you would quote "£50+VAT, Guv".

If you are quoting a direct end customer (ie: Joe Blogs) then you would just quote "£60".

Invoicing:

As a VAT registered entity I believe that you are obliged by law to display clearly on your invoice both your VAT number and a full breakdown of the costs showing exactly how much has been charged in VAT. This applies whether the client is a company/business or individual.

Also, you must inform yourself of what kinds of things are liable for VAT such as your loaded miles and the M6 Toll and those which are not liable for VAT such as the London Congestion Charge.

Do not apply VAT to things which do not attract VAT! Do not forget to apply VAT to those things which do.

Por Ejemplo:

Loaded miles = £50 (+VAT) M6 Toll = £4.58 (+VAT) LCC = £10 (no VAT)

The invoice would be as follows:

Loaded Miles £50 M6 Toll = £4.58 Ex Vat Total = £50 + £4.58 = £54.48 VAT @ 20% = (£54.48/100)*20 = £10.89

Inc Vat Total = £54.48 + £10.89 = £65.38

Total Non Vat items (LCC) = £10.

Balance due = Inc Vat Total + Total Non Vat items:

£65.38 + £10.

Balance due = £65.38 (all above figures rounded for simplicity).

Don't forget to show your VAT number on the invoice. Don't forget to NOT spend the VAT portion of the charge.

If this makes no sense or is in any way complicated. See my first post in this topic and SPEAK TO AN ACCOUNTANT!

Balance due = £75.38. Now do you see why you should speak to an accountant.

wow. I ran outta fingers.

Blimey you know her too eh?

Hello. Who can help me with an courier/haulage invoice form. I want to see exactly how should be an invoice for sole trader, not with VAT.

1van2man said:

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Hello. Who can help me with an courier/haulage invoice form. I want to see exactly how should be an invoice for sole trader, not with VAT.

This was taken from your pofile... (We have years of combined experience in the business) and your asking for help to fill out an Invoice without VAT, if youve been at it years why you asking now unless you've charged CIH without an Invoice .. Tip Go to your local stationary and buy an invoice book, or do research on the internet, microsoft has some templates.

If folk dont know how to charge vat or fill in a simple Invoice without vat they shouldnt be in business, god help those who are Vat registered and dont know what theyre doing, I wonder what the next question will be after the first quarter return?

I guess the original poster decided it was too much after his 1st weeks work.. lol

Peter Riley said: Also, you must inform yourself of what kinds of things are liable for VAT such as your loaded miles and the M6 Toll and those which are not liable for VAT such as the London Congestion Charge.

Do not apply VAT to things which do not attract VAT! Do not forget to apply VAT to those things which do.

You're making it more complicated than it needs to be there. Whether or not the London Congestion charge is liable for VAT doesn't matter when invoicing your client. You are not charging them the congestion charge because you are not Transport for London. You may well be increasing your quote by £10 to cover your cost of paying the charge, but as far as your client is concerned that is all part of the service you are providing, therefore the whole amount is subject to VAT.

Mr G -Award winning courier service said:

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I guess the original poster decided it was too much after his 1st weeks work.. Lol

Boy is he in for a shock if he doesnt know what hes doing... Some folk dont look beyond page 1 of the forum and just ask the question, the thread Vat or Non vat may have answered some of his questions and could be an eye opener..

Just a pointer for Myvancan. Com Look at the bottom of any London cc receipt... There is a VAT Number. What do you think about that?

Nottingham & Derby Couriers said:

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Just a pointer for Myvancan. Com Look at the bottom of any London cc receipt... There is a VAT Number. What do you think about that?

I don't think anything about it, it's not relevant. It only matters whether the London CC is VAT rated or not when you do your VAT return, not when invoicing your client.

MyVanCan.com said:

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Peter Riley said: Also, you must inform yourself of what kinds of things are liable for VAT such as your loaded miles and the M6 Toll and those which are not liable for VAT such as the London Congestion Charge.

Do not apply VAT to things which do not attract VAT! Do not forget to apply VAT to those things which do.

You're making it more complicated than it needs to be there. Whether or not the London Congestion charge is liable for VAT doesn't matter when invoicing your client. You are not charging them the congestion charge because you are not Transport for London. You may well be increasing your quote by £10 to cover your cost of paying the charge, but as far as your client is concerned that is all part of the service you are providing, therefore the whole amount is subject to VAT.

Wrong.

MyVanCan.com said:

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Nottingham & Derby Couriers said:

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Just a pointer for Myvancan. Com Look at the bottom of any London cc receipt... There is a VAT Number. What do you think about that?

I don't think anything about it, it's not relevant. It only matters whether the London CC is VAT rated or not when you do your VAT return, not when invoicing your client.

Wrong again.

Transport for London is VAT registered because it earns more than the threshold where it is obligatory to register foe VAT! The London congestion charge is a not vatable expense! Since you do not pay VAT within the congestion charge you are not entitled to charge VAT on it. If you do charge VAT on the london congestion charge not only are you breaking the law, but you are legally obliged to pay the whole amount of VAT that you have charged on it to the VAT man.

You can obviously add £2 profit to the london congestion charge if you wish (the whole payment then being £12 with no VAT of course). However this something I would not recommend. Most customers would question this practice.

If you doubt any of what I have said MyVam.com then I suggest you speak to your accountant, transport for london and the VAT man.

I think you'll find that I am 100% correct.

Scott.

Peter Riley said:

If you doubt any of what I have said MyVam.com then I suggest you speak to your accountant, transport for london and the VAT man.

Thankyou for your suggestion Peter but I am already informed on this by an accountant.

I think you'll find that I am 100% correct.

Scott.

I think you'll find it's not quite so clear. Let's see what HM Revenue and Customs themselves say on this page:

http://www.hmrc.gov.uk/vat/managing/charging/disbursements.htm

What isn't a disbursement for VAT purposes

There are many incidental costs that your business might incur that you can't exclude from the VAT calculation when you invoice your customers. These could include travelling expenses and your own postage costs. They aren't treated as disbursements for VAT purposes.

Any costs that your business incurs itself in the course of supplying goods or services to customers are not disbursements for VAT purposes. It's you, and not your customer, who purchases the goods or services, which are supplied to and used by your business.

It's up to you whether or not you itemise costs like these on your invoices. If you do show them separately when you invoice your customers then they're known as 'recharges', and not disbursements, for VAT. You'll have to charge VAT on them whether you paid any VAT or not.

Some examples of costs that could be recharges but are not disbursements include: • An airline ticket that you buy to visit a client or to travel to a job. If you recharge the cost to your client you must charge VAT because the flight was for you, not for the client. • Postage costs you incur when you send letters to your customers. These are normal business costs and you must add VAT if you recharge them. • A bank transfer fee you might incur when transferring money from your business account to a client's own account. Even though the bank's fee is exempt from VAT, if you recharge the fee you must charge VAT. This is because it was for a service provided to your business and not to your customer

The congestion charge is a cost that you yourself incur in the course of supplying courier services to your client, just as buying diesel, insurance, tyres and so on are too. You are not supplying "the congestion charge" to your client - how can you? You were the one who drove into the CC zone, not them.

If your accountant disagrees, I suggest you find a new one.

To be honest guys who gives a flying toss whether the con charge is vatable or not

When I quote a customer it includes the fact that i'm going to have to pay the driver for the charge And when I sub it i'll pay what the man quotes. His quote will include the con charge, his fuel, his time I don't expect a breakdown of that quote so i don't care. I'm not paying the charge, i'm not paying his fuel, and i'm not paying for the 3 fags he's had while doing the job either

It's not important

Mr G -Award winning courier service said:

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I guess the original poster decided it was too much after his 1st weeks work.. Lol

Too busy doing kiddie discos to answer his phone - and only a couple of miles from me.

Gas Motorcycle Couriers said:

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1van2man said:

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Hello. Who can help me with an courier/haulage invoice form. I want to see exactly how should be an invoice for sole trader, not with VAT.

This was taken from your pofile... (We have years of combined experience in the business) and your asking for help to fill out an Invoice without VAT, if youve been at it years why you asking now unless you've charged CIH without an Invoice .. Tip Go to your local stationary and buy an invoice book, or do research on the internet, microsoft has some templates.

If folk dont know how to charge vat or fill in a simple Invoice without vat they shouldnt be in business, god help those who are Vat registered and dont know what theyre doing, I wonder what the next question will be after the first quarter return?

Sorry for asking. I have 3 types of invoice, but until now i make only removals and i just want to know exactly what type of invoices you use for courier work. I know are a lot on the internet, or in store. But are to many and i cant decide. I dont need help to fill out an invoice and i really do removals for about 3-4 years with invoices. I pay my taxes every year, i dont work in the black market. And i think, a forum is for talking and questions/answers. Thanks and sorry for my bad english.

Speed Couriers (Stansted) said:

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To be honest guys who gives a flying toss whether the con charge is vatable or not

When I quote a customer it includes the fact that i'm going to have to pay the driver for the charge And when I sub it i'll pay what the man quotes. His quote will include the con charge, his fuel, his time I don't expect a breakdown of that quote so i don't care. I'm not paying the charge, i'm not paying his fuel, and i'm not paying for the 3 fags he's had while doing the job either

It's not important

Exactly what I was getting at in my first post. It is important though, as if you do things the way Peter/Scott was describing, you'll be doing it wrong, and as someone else said, you really don't want to f**k up with Customs and Excise.

MyVanCan.com said:

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Speed Couriers (Stansted) said:

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To be honest guys who gives a flying toss whether the con charge is vatable or not

When I quote a customer it includes the fact that i'm going to have to pay the driver for the charge And when I sub it i'll pay what the man quotes. His quote will include the con charge, his fuel, his time I don't expect a breakdown of that quote so i don't care. I'm not paying the charge, i'm not paying his fuel, and i'm not paying for the 3 fags he's had while doing the job either

It's not important

Exactly what I was getting at in my first post. It is important though, as if you do things the way Peter/Scott was describing, you'll be doing it wrong, and as someone else said, you really don't want to f**k up with Customs and Excise.

No, MyVanCan.

If you do it the way you suggest it will be wrong, and you WILL end up on the wrong end of a nasty VAT inspection.

Scott.

Listen guys its simple enough

If you quote me £50 for a London to London which involves the con charge then so what? You're charging me £50 + vat... The con charge has nothing to do with it I'm not paying it, and you're not forwarding the charge to me

You are merley charging a price for a job... The fact that YOU have to pay the con charge is a completely seperate matter and one that doesn't need discussing... You may well have included it in your price, as you would any other additional expense such as a toll, but its irrelevant

If you quote £40 PLUS the congestion charge then that's a different matter

Make life easy and quote inclusive

Speed Couriers (Stansted) said:

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Listen guys its simple enough

If you quote me £50 for a London to London which involves the con charge then so what? You're charging me £50 + vat... The con charge has nothing to do with it I'm not paying it, and you're not forwarding the charge to me

You are merley charging a price for a job... The fact that YOU have to pay the con charge is a completely seperate matter and one that doesn't need discussing... You may well have included it in your price, as you would any other additional expense such as a toll, but its irrelevant

If you quote £40 PLUS the congestion charge then that's a different matter

Make life easy and quote inclusive

Life would be so boring if people quoted inclusive don't you think, I mean who would of thought a congestion zone receipt would of made life so interesting.

istrong textn·ter·est·ing [in-ter-uh-sting, -truh-sting, -tuh-res-ting]

adjective

1. engaging or exciting and holding the attention or curiosity: an interesting book.

2. arousing a feeling of interest: an interesting face.

Dunno bout you but i'm deffo not in a state of arousal when discussing VAT or the con chargestrong text

1van2man said:

Sorry for asking. I have 3 types of invoice, but until now i make only removals and i just want to know exactly what type of invoices you use for courier work. I know are a lot on the internet, or in store. But are to many and i cant decide. I dont need help to fill out an invoice and i really do removals for about 3-4 years with invoices. I pay my taxes every year, i dont work in the black market. And i think, a forum is for talking and questions/answers. Thanks and sorry for my bad english.

Personally I have one invoice for all my customers, and a Invoice book for anything else, when completeing the invoice dont include vat at the end.. Just total up what youve charged simples, make sure your logo/name Tel/WWW of your business is on the top somewhere same with your customer details and the word Invoice along with invoice number, invoice date, terms, due date, include all relavant information, then under that description with 2 columns in which 1st column may be unit price and 2nd column line total, at the bottom your details should be applied, name, address, make cheques payable, Thank You, so on so forth. You can design it to your own spec.
I downloaded a couple from Microsoft, then altered them to my own design.. There are no special designs for different transport sectors. REMEMBER DO NOT INCLUDE VAT IF YOURE NOT VAT REGISTERED

I'm not saying that every single item needs to be listed separately on an invoice.

However if an owner driver is VAT registered then the invoice must show the ex VAT total, the amount of VAT to be paid and the total inclusive of VAT.

None of this however affects the fact that there are some things which an owner driver will bill for which are not subject to VAT. Nor does it affect the fact that applying VAT to non vatable goods or services is illegal.

This was my whole point! I only used the congestion charge as an example. I hope I have managed to explain myself better this time.

Scott.

I think you really ought to check that your facts are right if you are going to give advise. Whether your costs have incurred vat or not, if you are vat registered, you Must charge vat on the whole of your service. I have, today, spoken to a charted accountant who confirms this.

3D Courier Services said:

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I think you really ought to check that your facts are right if you are going to give advise. Whether your costs have incurred vat or not, if you are vat registered, you Must charge vat on the whole of your service. I have, today, spoken to a charted accountant who confirms this.

I think this is a classic example of what happens here all too often. Some people on here are not giving advice, they are telling you what you must do based on their opinion or understanding of a situation.

From what I've read on the link to the HMRC and my understanding of the situation, including statement from 3D, I would say it sounds like Scott (Peter Riley) does in fact have it wrong on this occasion.

In my opinion, as I am not a Chartered Accountant or the oracle of VAT knowledge, I would suggest the following....

Anyone that has an interest in the subject discussed should consult someone qualified to advise on such a matter, and treat all comments here as opinion and discussion points only, before making their decision on how to create their invoicing.

When doing your accounts you have a Z rating and an S rating

Z for anything that does not incur VAT and S for those that do

For example postage... That does NOT incur VAT so for accounting purposes you would NOT include any postage to your VAT return

However, a VAT return is not the same as an Invoice

I think this is where some are getting confused

If you were charging the cost of your postage on, then you would NOT charge VAT on that eventhough you are VAT Registered

In our case, as couriers, we charge our customers VAT on everything as we are vat registered.

The fact some of that may or may not include the con charge is completely irrelevant until you come to doing you VAT return

As i said in an earlier post on this thread, you don't charge the con charge seperately, because you quote a price for a job... Not the price for the job plus the con charge----the fact that you are paying the con charge is completely irrelevant, as is the stamp you've just put on the envelope to post the invoice!

Example

You quote £50 for a job, you're vat registered so you invoice

11/4/2013 from A to B £50.00

                VAT £10.00
              TOTAL £60.00  

A tenner may well have been part of the costs for you but completely and utterly irrelevant for your invoice to whoever it is you're doing the job for.

When you're doing your accounts howver, you'll have 2 x columns, stuff you've bought thats vat registered like fuel, and stuff you've bought that isn't, the con harge, postage etc etc.

When doing a vat return it'll be every invoice you've issued minus any vat you've paid out for fuel, repairs etc etc.

So to summarise

STOP TALKING ABOUT THE F IN CON CHARGE

AND GO BUY A BLEEDIN SCOOTER... lol

Speed Couriers (Stansted) said:

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AND GO BUY A BLEEDIN SCOOTER... Lol

Or get a Polish Registered Van!

BEP TRANS said:

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Speed Couriers (Stansted) said:

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AND GO BUY A BLEEDIN SCOOTER... Lol

Or get a Polish Registered Van!

Or you can park up outside the congestion charge area and walk in with your 3 pallets

3D Courier Services said:

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I think you really ought to check that your facts are right if you are going to give advise. Whether your costs have incurred vat or not, if you are vat registered, you Must charge vat on the whole of your service. I have, today, spoken to a charted accountant who confirms this.

Wrong! There are goods and services which do not attract VAT. If they don't attract VAT then it makes no difference if you are VAT registered or not. You do not charge VAT on non-vatable items.

Fact!

I've been dealing with the VAT since I was 18 years old!

Scott.

Scott Garner said:

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3D Courier Services said:

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I think you really ought to check that your facts are right if you are going to give advise. Whether your costs have incurred vat or not, if you are vat registered, you Must charge vat on the whole of your service. I have, today, spoken to a charted accountant who confirms this.

I think this is a classic example of what happens here all too often. Some people on here are not giving advice, they are telling you what you must do based on their opinion or understanding of a situation.

From what I've read on the link to the HMRC and my understanding of the situation, including statement from 3D, I would say it sounds like Scott (Peter Riley) does in fact have it wrong on this occasion.

In my opinion, as I am not a Chartered Accountant or the oracle of VAT knowledge, I would suggest the following....

Anyone that has an interest in the subject discussed should consult someone qualified to advise on such a matter, and treat all comments here as opinion and discussion points only, before making their decision on how to create their invoicing.

Speak to the VAT man directly!

Scott.

Speed Couriers (Stansted) said:

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When doing your accounts you have a Z rating and an S rating

Z for anything that does not incur VAT and S for those that do

For example postage... That does NOT incur VAT so for accounting purposes you would NOT include any postage to your VAT return

However, a VAT return is not the same as an Invoice

I think this is where some are getting confused

If you were charging the cost of your postage on, then you would NOT charge VAT on that eventhough you are VAT Registered

In our case, as couriers, we charge our customers VAT on everything as we are vat registered.

The fact some of that may or may not include the con charge is completely irrelevant until you come to doing you VAT return

As i said in an earlier post on this thread, you don't charge the con charge seperately, because you quote a price for a job... Not the price for the job plus the con charge----the fact that you are paying the con charge is completely irrelevant, as is the stamp you've just put on the envelope to post the invoice!

This is what I am getting at Rob. Charges that you pay which do not incur VAT may not have VAT added to them, whether you are VAT registered or not.

This has been my whole point!

Scott.

Speed Couriers (Stansted) said:

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Example

You quote £50 for a job, you're vat registered so you invoice

11/4/2013 from A to B £50.00

                VAT £10.00
              TOTAL £60.00  

A tenner may well have been part of the costs for you but completely and utterly irrelevant for your invoice to whoever it is you're doing the job for.

When you're doing your accounts howver, you'll have 2 x columns, stuff you've bought thats vat registered like fuel, and stuff you've bought that isn't, the con harge, postage etc etc.

When doing a vat return it'll be every invoice you've issued minus any vat you've paid out for fuel, repairs etc etc.

So to summarise

STOP TALKING ABOUT THE F IN CON CHARGE

The congestion charge is completely irrelevant in this whole discussion! IT WAS PURELY AN EXAMPLE!

The point is that items which are non vatable at the point of purchase can not have VAT added at the point or resale, regardless of whether you are VAT registered or not!

Scott.

But you are not selling a non vatable item, you are selling a courier service!

Scott Garner said:

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3D Courier Services said:

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I think you really ought to check that your facts are right if you are going to give advise. Whether your costs have incurred vat or not, if you are vat registered, you Must charge vat on the whole of your service. I have, today, spoken to a charted accountant who confirms this.

I think this is a classic example of what happens here all too often. Some people on here are not giving advice, they are telling you what you must do based on their opinion or understanding of a situation.

From what I've read on the link to the HMRC and my understanding of the situation, including statement from 3D, I would say it sounds like Scott (Peter Riley) does in fact have it wrong on this occasion.

In my opinion, as I am not a Chartered Accountant or the oracle of VAT knowledge, I would suggest the following....

Anyone that has an interest in the subject discussed should consult someone qualified to advise on such a matter, and treat all comments here as opinion and discussion points only, before making their decision on how to create their invoicing.

Hi Scott G,

I can guarantee you that I do not have it wrong!

I will direct you to your statement above:

"From what I've read on the link to the HMRC and my understanding of the situation, including statement from 3D, I would say it sounds like Scott (Peter Riley) does in fact have it wrong on this occasion.

In my opinion, as I am not a Chartered Accountant or the oracle of VAT knowledge, I would suggest the following.... "

From what you have read, and in your opinion!

I have been dealing with VAT for 19 years!

Scott.

3D Courier Services said:

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But you are not selling a non vatable item, you are selling a courier service!

The "service" you are selling ie:Courier service! Is a service which attracts VAT!

The additional costs associated with providing that service may be costs which attract VAT or which do not attract VAT!

If the cost to you does not attract VAT then you can pass that cost on but you may NOT add VAT to that cost!

Scott.

I'll provide a slightly different example. It has nothing to do with courier work, but everything to do with VAT!

My Father has operated his own business for the last 30 years delivering crisps, sweets, chocolate and pop to various retail outlets such as corner shops and chip shops in Glasgow.

He is and always has been VAT registered.

On almost every item he sells he applies VAT, except cake products such as Jaffa Cakes.

Jaffa Cakes are classed as cakes and therefor are VAT exempt!

Since he is not charged VAT when he buys them from the wholesaler, he does not charge VAT on the sale price. He just adds the profit that he needs to add and that is it. They figure in to his total earnings when it comes to income tax, but they have nothing to do with his VAT return.

There are many other products/services for which you don't pay VAT.

If you don't pay VAT to buy it, then you don't charge VAT when you sell it. It doesn't matter if you are VAT registered.

Scott.

Speed Couriers (Stansted) said:

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Example

You quote £50 for a job, you're vat registered so you invoice

11/4/2013 from A to B £50.00

                VAT £10.00
              TOTAL £60.00  

A tenner may well have been part of the costs for you but completely and utterly irrelevant for your invoice to whoever it is you're doing the job for.

When you're doing your accounts howver, you'll have 2 x columns, stuff you've bought thats vat registered like fuel, and stuff you've bought that isn't, the con harge, postage etc etc.

When doing a vat return it'll be every invoice you've issued minus any vat you've paid out for fuel, repairs etc etc.

So to summarise

STOP TALKING ABOUT THE F IN CON CHARGE

Hey Rob, the congestion charge is not the point! The point is that there is someone on here who thinks that it is perfectly acceptable to apply VAT to something which does not attract VAT!

This is completely illegal!

Scott.

Peter Riley said:

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Quoting:

If you are quoting a courier company or direct business client of your own then you would quote "£50+VAT, Guv".

If you are quoting a direct end customer (ie: Joe Blogs) then you would just quote "£60".

Invoicing:

As a VAT registered entity I believe that you are obliged by law to display clearly on your invoice both your VAT number and a full breakdown of the costs showing exactly how much has been charged in VAT. This applies whether the client is a company/business or individual.

Also, you must inform yourself of what kinds of things are liable for VAT such as your loaded miles and the M6 Toll and those which are not liable for VAT such as the London Congestion Charge.

Do not apply VAT to things which do not attract VAT! Do not forget to apply VAT to those things which do.

Por Ejemplo:

Loaded miles = £50 (+VAT) M6 Toll = £4.58 (+VAT) LCC = £10 (no VAT)

The invoice would be as follows:

Loaded Miles £50 M6 Toll = £4.58 Ex Vat Total = £50 + £4.58 = £54.48 VAT @ 20% = (£54.48/100)*20 = £10.89

Inc Vat Total = £54.48 + £10.89 = £65.38

Total Non Vat items (LCC) = £10.

Balance due = Inc Vat Total + Total Non Vat items:

£65.38 + £10.

Balance due = £65.38 (all above figures rounded for simplicity).

Don't forget to show your VAT number on the invoice. Don't forget to NOT spend the VAT portion of the charge.

If this makes no sense or is in any way complicated. See my first post in this topic and SPEAK TO AN ACCOUNTANT!

I repeat my earlier post in this thread for the sake of clarity.

Scott.

Which should have read total = £58.50,

But you get the idea! (I hope!)

Scott

Scott, you're confusing everyone because you're talking about three different things

Invoices

Vat returns

Bought Ledger

Its only when you're doing a vat return or when you're doing your bought ledger (or profit and loss account) that you need to differenciate that that is, and that that isn't vatable

Mr Mans invoice to me, if he's vatable, should be exactly that, his price to me, plus vat

He is selling me his time, he is not a product, his expenses have nothing to do it.

When he's doing his accounts then obviously his expenses will have either a z (zero) or s (standard) rate of vat and his vat return will take those that are vatable into account, deducted from all his invoices... simples

Your example is WRONG

Rob, we are trying to explain the same thing in a different way!

Scott.

I am certainly NOT wrong in what I am saying.

I am trying to prevent people from making a mistake which normally costs VAT registered sole traders a hell of a lot of money by avoiding some of the tiny little pit falls which can happen if the sole trader in question is not properly informed of the VAT regulations.

That mistake being, that charging VAT on top of a cost incurred which does not attract VAT is illegal!

Scott.

The big joke is that the original poster seems to be nowhere in this thread, so what the bloody hell are we all going on about (myself included!)

Scott.

It was posted in October what do you expect?

Peter Riley said:

I have been dealing with VAT for 19 years!

Scott.

And exactly what does that prove? Rules and regulations change, very often with the budget set by our Chancellor. The link provided up above directs you to the current HMRC website which explains exactly where you may be wrong.

There is no need to get all shirty with me, if you read my post properly I stated quite clearly that I am no expert on VAT, but I can quite capably read and understand the English language.

Peter Riley said:

---

I'll provide a slightly different example. It has nothing to do with courier work, but everything to do with VAT!

My Father has operated his own business for the last 30 years delivering crisps, sweets, chocolate and pop to various retail outlets such as corner shops and chip shops in Glasgow.

He is and always has been VAT registered.

On almost every item he sells he applies VAT, except cake products such as Jaffa Cakes.

Jaffa Cakes are classed as cakes and therefor are VAT exempt!

Since he is not charged VAT when he buys them from the wholesaler, he does not charge VAT on the sale price. He just adds the profit that he needs to add and that is it. They figure in to his total earnings when it comes to income tax, but they have nothing to do with his VAT return.

There are many other products/services for which you don't pay VAT.

If you don't pay VAT to buy it, then you don't charge VAT when you sell it. It doesn't matter if you are VAT registered.

Scott.

This here example of yours is the perfect explanation to where you have got it wrong. Your example states that selling the Jaffa Cakes (other cakes are available) to a customer with VAT charged is wrong, I agree. This is because the customer then owns and has use of the Jaffa Cakes. As it quite clearly states in that HMRC article, if the customer does not directly receive/own the goods or service then you must charge VAT on it, whether or not it is itemised is irrelevant.

Therefore, CC / some tolls / postage etc can be subject to VAT. Eg when you purchase from an online supplier such as Amazon they charge VAT on P&P. Post and packaging not just the packaging.

Also, are you 100% sure that Jaffa Cakes are not VATable, as I thought anything covered in chocolate was VATable ie digestive biscuits are not subject to VAT whereas choccie digestives are.

Peter Riley said:

If you don't pay VAT to buy it, then you don't charge VAT when you sell it. It doesn't matter if you are VAT registered.

Scott.

No-one is disputing that - that is absolutely correct. But do you not see the difference between supplying cakes to a customer, and paying for the congestion charge during the course of providing your courier service?

You are not supplying "the congestion charge" to your client, any more than you are supplying the diesel, the insurance, the van wear and tear, the coffee you drank to keep you awake, the parking ticket you had to pay for, etc, etc. All those are YOUR costs, not your client's.

To prove this, suppose that after your job that took you into the CC zone, you then do another one for another client. Do you pay the charge twice, one for each client? No of course not, you can't pay it twice on the same day anyway.

The congestion charge applies to you, not your client. Your client doesn't care what costs you had to incur while providing your service. All they care is the price you agreed, whether you itemise it or not. And you must add VAT to the whole thing either way.

This post should be locked, it's starting to twist my melon man.

I agree ajm. There are none so blind as those who will not see!

Gas Motorcycle Couriers said:

---

1van2man said:

Sorry for asking. I have 3 types of invoice, but until now i make only removals and i just want to know exactly what type of invoices you use for courier work. I know are a lot on the internet, or in store. But are to many and i cant decide. I dont need help to fill out an invoice and i really do removals for about 3-4 years with invoices. I pay my taxes every year, i dont work in the black market. And i think, a forum is for talking and questions/answers. Thanks and sorry for my bad english.

Personally I have one invoice for all my customers, and a Invoice book for anything else, when completeing the invoice dont include vat at the end.. Just total up what youve charged simples, make sure your logo/name Tel/WWW of your business is on the top somewhere same with your customer details and the word Invoice along with invoice number, invoice date, terms, due date, include all relavant information, then under that description with 2 columns in which 1st column may be unit price and 2nd column line total, at the bottom your details should be applied, name, address, make cheques payable, Thank You, so on so forth. You can design it to your own spec.
I downloaded a couple from Microsoft, then altered them to my own design.. There are no special designs for different transport sectors. REMEMBER DO NOT INCLUDE VAT IF YOURE NOT VAT REGISTERED

Thanks man. You explain very well. And i know how the vat works. Im not vat payer. Im self-employed, sole trader. Thanks.

Crazy... I give up

**

After Reading all the replies, my head seems to have visited the roundabout city... I rest my case on the Vat or Non Vat registered thread, if you werent vat registered you wouldnt have this problem :-)

**

But then again if you had a motorcycle you wouldnt need to charge congestion charge. :)

Its not a problem i assure you... Some have just got it wrong

Once you hit the threshold you'll see how simple it is

I have slept on this, but can somebody just explain it please?

I will try to put this to bed. The following is from the HMR&C website.

What isn't a disbursement for VAT purposes

There are many incidental costs that your business might incur that you can't exclude from the VAT calculation when you invoice your customers. These could include travelling expenses and your own postage costs. They aren't treated as disbursements for VAT purposes.

Any costs that your business incurs itself in the course of supplying goods or services to customers are not disbursements for VAT purposes. It's you, and not your customer, who purchases the goods or services, which are supplied to and used by your business.

It's up to you whether or not you itemise costs like these on your invoices. If you do show them separately when you invoice your customers then they're known as 'recharges', and not disbursements, for VAT. You'll have to charge VAT on them whether you paid any VAT or not.

Some examples of costs that could be recharges but are not disbursements include:

• An airline ticket that you buy to visit a client or to travel to a job. If you recharge the cost to your client you must charge VAT because the flight was for you, not for the client.
• Postage costs you incur when you send letters to your customers. These are normal business costs and you must add VAT if you recharge them.
• A bank transfer fee you might incur when transferring money from your business account to a client's own account. Even though the bank's fee is exempt from VAT, if you recharge the fee you must charge VAT. This is because it was for a service provided to your business and not to your customer.

For the last time!

If something is VAT exempt, ie: You are not charged VAT within the purchase price, then it is 100% exempt from VAT!

Even if you are VAT registered, the item for which you are passing the cost on to your customer is still VAT exempt!

As such, if you weren't charged VAT on a course which you incurred in the course of your work which you then pass on to your customer, you are NOT entitled to add VAT to that cost.

"Disbursement!" is a completely different thing. Go look at a dictionary!

I will not say anything else on this thread other than, if you don't understand VAT, speak to an accountant!

Scott.

I think the mistake you're making is you are assuming a courier needs to break down his costs, which he doesn't

He may well have based his quote to me on a mileage rate + toll + con charge to get to his price BUT I don't care about any of that. All i'm interested in is his price for him to do a job from a to b. And that price is to include all expenses including petrol tolls etc etc.

His invoice to me is therefore for his time which, if he is vatable, is his price PLUS vat

How he got to that price has jack shite to do with me, customs and excise or anyone else

When submitting his accounts, however, he'll have his invoices in one column... His sales

And his expenses in another, broken down as those that are vatable, and those that are not

I feel like a parrott, i said i feel like a parrott

Peter Riley said:

---

I will not say anything else on this thread other than, if you don't understand VAT, speak to an accountant!

Scott.

Best bit of advise that you have ever given on this forum!

Peter Riley said:

---

There are none so blind as those who will not see!

I have only just about managed to stop laughing at the irony in this statement!

Peter Riley said:

---

For the last time!

If something is VAT exempt, ie: You are not charged VAT within the purchase price, then it is 100% exempt from VAT!

Even if you are VAT registered, the item for which you are passing the cost on to your customer is still VAT exempt!

As such, if you weren't charged VAT on a course which you incurred in the course of your work which you then pass on to your customer, you are NOT entitled to add VAT to that cost.

"Disbursement!" is a completely different thing. Go look at a dictionary!

I will not say anything else on this thread other than, if you don't understand VAT, speak to an accountant!

Scott.

You repeatedly bang on with the same response, not actually answering the questions or pointing out where those of us who disagree with you are wrong (in your opinion).

Why would anyone need to look at the dictionary definition of the word disbursement in regards to this debate? The post by 3D is quoting directly from the HMRC link, that I feel you clearly haven't understood, and as such is the terminology used by HMRC to describe a situation, which they clarify by giving examples. Whether or not that accurately follows the dictionary definition is totally irrelevant.

3D Courier Services said:

---

Peter Riley said:

---

I will not say anything else on this thread other than, if you don't understand VAT, speak to an accountant! Scott.

Best bit of advise that you have ever given on this forum!

Only if he can practice what he preaches and do exactly that, although I assumed from his authoritative tone that he was indeed an oracle of VAT and qualified to instruct us all in exactly how to go about our VAT affairs. I, for one, will gladly consult with an appropriately qualified person to clarify if I have understood correctly. If I do indeed find that I have misunderstood, I will gladly come and explain how and where I am wrong. If I am indeed correct in my understanding I will also come back and explain.

I, m so glad I have a life.

Im so glad Im not vat registered.. And when I am, I will charge VAT on the full price and, not itemised into small bits and charge accordingly..

And you'd be doing exactly what you should Gas Man

My understanding is if you quote a price for the job then vat would be charged on the quoted price.

If you as a subby charge the subber x amount plus congestion charge then the x amount is vatable but con chge is exempt.

So both arguments are correct depending on how you quote.

It's you, and not your customer, who purchases the goods or services, which are supplied to and used by your business.

You'll have to charge VAT on them whether you paid any VAT or not.

This is an extract from the HMR&C Guidelines. How difficult is this to understand?

AM-PM Despatch said:

---

My understanding is if you quote a price for the job then vat would be charged on the quoted price.

If you as a subby charge the subber x amount plus congestion charge then the x amount is vatable but con chge is exempt.

So both arguments are correct depending on how you quote.

Your understanding is wrong. Read the page on the HM Revenue and Customs website that 3D and I both quoted from. It doesn't matter whether or not you break down how you made up the invoice, you apply VAT on the whole amount.

How much more clearly can we make it? The congestion charge may be VAT exempt but you are not selling the congestion charge. You are only covering the cost of it to you, in the price you charge your client. You could decide to only cover part of the cost of it, or none of the cost of it, or more than the cost of it. It doesn't matter.

Indeed the courier company I sub for in North London only passes on 2/3rds of the cost to their clients, and when they pay me for the con charge on the self billing onvoices they give me every week, they pay VAT on the whole thing. And I think their accountants know their onions pretty well.

I don't get what the argument is, even if you didn't have to pay vat on say the congestion charge, as 3d put on his quote from hmrc, if your charging it back to your customer you must add the vat.

SG Sameday said:

---

I don't get what the argument is, even if you didn't have to pay vat on say the congestion charge, as 3d put on his quote from hmrc, if your charging it back to your customer you must add the vat.

Not an argument mate, more like a discussion, but if I was one of the companies who allow employees to give misguided advice on vat, I would be very afraid of a visit from the vat man!

I know he's an ugly bruiser... Sorry i thought you said fat man... It's getting late

I think this thread has gone too far

If i call someone a fool maybe it'll get this topic closed too

In the immortal words of website admin. "Sigh" I got better things to do! And Rob, how can you say things have gone too far? Just joking, as always, mate. Speak soon.

I'm afraid it is only the limited few who really get to me... And i've outlasted most of em

We're a self policing lot tho aren't we?

Is it not our duty to warn others as well as help and give advice?

Perhaps a few topics have gone a bit too far recently, but that doesn't mean the basis of them is not fundamentally correct, and though they may be closed and edited from time to time, we have a duty to our profession to be as honest and ethical as we can don't we?

It has absolutely nothing to do with smearing a competitor, and everything to do with enlightening those that are naive and too trustworthy.

Specifically to SG Sameday, 3D Courier Services and MyVanCan but also for the benefit of those who have read your comments and tried to rubbish the information which I have provided, the following is and excerpt from the HMRC website which specifies with no doubt whatsoever that you do not charge VAT on VAT exempt goods or services.

Excerpt from HMRC pages!

Exempt goods and services

There are some goods and services that are exempt from VAT. Exempt goods and services are not taxable for VAT, so if you supply them, then:

you don't charge any VAT on them

You can view this information for yourself directly from the link which I have provided below.

http://www.hmrc.gov.uk/vat/forms-rates/rates/rates.htm#5

As you will see I have been absolutely 100% correct at all times. So my advice was not "misguided" (might I also point out 3D that I am also not an employee.

So may I now suggest that all three of you check your facts before trying to rubbish the advice of someone who has over 20 years experience of dealing with VAT!

Scott.

http://www.hmrc.gov.uk/vat/forms-rates/rates/rates.htm#5

Peter Riley said:

---

Specifically to SG Sameday, 3D Courier Services and MyVanCan but also for the benefit of those who have read your comments and tried to rubbish the information which I have provided, the following is and excerpt from the HMRC website which specifies with no doubt whatsoever that you do not charge VAT on VAT exempt goods or services.

Excerpt from HMRC pages!

Exempt goods and services

There are some goods and services that are exempt from VAT. Exempt goods and services are not taxable for VAT, so if you supply them, then:

you don't charge any VAT on them

You can view this information for yourself directly from the link which I have provided below.

http://www.hmrc.gov.uk/vat/forms-rates/rates/rates.htm#5

As you will see I have been absolutely 100% correct at all times. So my advice was not "misguided" (might I also point out 3D that I am also not an employee.

So may I now suggest that all three of you check your facts before trying to rubbish the advice of someone who has over 20 years experience of dealing with VAT!

Scott.

What you do not seem to understand, Scott, is that as a courier, trading solely inside the EU, there is not on thing that you can "sell" that is vat exempt. All your vat exempt and zero rated purchases are "your " expenses and you are not supplying or selling them. May I refer to my earlier post with an extract from the HMR&C website.

And, for anyone out there that wants confirmation of the facts dial this number, HMR&C, as I have just done and get it from the horses mouth. 0845 010 9000.

I have to agree with Steve and, sorry Scott, most threads we agee on, but this you are very much wrong. You are quoting something from HMRC that is just not applicable for a Courier as, AND I'LL KEEP SAYIN IT UNTIL ITS ACKNOWLEDGED, an invoice from a courier is his costing for his time, the breakdown of which are for his accounting purposes only and nothing to do with his cost to us which is for his time, nothing more HIS TIME

He may calculate "his time" costs to us on the basis of the miles incurred, the congestion charge, a toll, diesel, a stamp for his invoice to us and a multitude of other "costs" but none of that has any relevance

Equally when I invoice my client, there is no breakdown of costs, merely the cost, plus vat, and the total thereof

Can we please get this topic closed and may i suggest anyone wanting to know, talk to an accountant direct, because looking on the HMRC website, assumes you know what it is you're searching for and its relevance to that search.

We are a service industry, not a product industry

We have nothing to sell but ourselves, and if we are vatable then so are our services to you

Peter Riley said:

---

Specifically to SG Sameday, 3D Courier Services and MyVanCan but also for the benefit of those who have read your comments and tried to rubbish the information which I have provided, the following is and excerpt from the HMRC website which specifies with no doubt whatsoever that you do not charge VAT on VAT exempt goods or services.

Excerpt from HMRC pages!

Exempt goods and services

There are some goods and services that are exempt from VAT. Exempt goods and services are not taxable for VAT, so if you supply them, then:

you don't charge any VAT on them

You can view this information for yourself directly from the link which I have provided below.

http://www.hmrc.gov.uk/vat/forms-rates/rates/rates.htm#5

As you will see I have been absolutely 100% correct at all times. So my advice was not "misguided" (might I also point out 3D that I am also not an employee.

So may I now suggest that all three of you check your facts before trying to rubbish the advice of someone who has over 20 years experience of dealing with VAT!

Scott.

Peter Riley said:

---

There are some goods and services that are exempt from VAT. Exempt goods and services are not taxable for VAT, so if you supply them, then:

you don't charge any VAT on them

As you will see I have been absolutely 100% correct at all times. So my advice was not "misguided" (might I also point out 3D that I am also not an employee.

So may I now suggest that all three of you check your facts before trying to rubbish the advice of someone who has over 20 years experience of dealing with VAT!

Scott.

You may notice that I have highlighted in bold where I think you're opinion is wrong, you are not supplying these the VAT exempt items, whether itemised or not, they are costs you incur.

I know this thread has been going on for a bit now but, your experience seems to have accelerated beyond normal earthly time. I'll refer you also to this point......

Scott Garner said:

---

Peter Riley said:

I have been dealing with VAT for 19 years!

Scott.

And exactly what does that prove? Rules and regulations change, very often with the budget set by our Chancellor. The link provided up above directs you to the current HMRC website which explains exactly where you may be wrong.

There is no need to get all shirty with me, if you read my post properly I stated quite clearly that I am no expert on VAT, but I can quite capably read and understand the English language.

You never did answer what that proves...

I give up!

Scott.

What would Harry Hill say.,.,.,.,.,.,.,..,.,...,..,.,.,.,.,.,.,.,,,.,.,.,.,.,. FIGHT!

Peter Riley said:

---

I give up!

Scott.

Don't give up Scott, just ring the number, press option 2 then option 6 ask the question then come back on here and apologise!

If you do an itemised Bill, as stated previously, you have a z and an s vat rate. This is only applicable if you are passing on your costs to soneone else.

We do not itemise our bills to eachother OR to our customers so none of it is applicable

I really am running out of different ways of saying the same thing!

We supply a service, we do not supply a product---in supplying that service you incur costs. They are your costs and are nothing to do with the purchaser of your services

Well since it clearly states on HMRC's own website that you can not charge VAT to your customer for products/services which are VAT exempt, I think I'll stick to how I've been doing it for the last 19 years lads.

BTW: Good luck to you on your first VAT inspection! :-)

Scott.

Peter Riley said:

---

Well since it clearly states on HMRC's own website that you can not charge VAT to your customer for products/services which are VAT exempt, I think I'll stick to how I've been doing it for the last 19 years lads.

BTW: Good luck to you on your first VAT inspection! :-)

Scott.

So does that mean you're still charging VAT at 17.5% as it was in 1994?

Jesus H Christ on a f•••ing BIKE!

That's all I have to say on the matter now.

I have been registered for vat since 1973, have had several vat inspections and had no problems. BUT just to be sure I rang the helpline Today. They confirmed what is clearly written on their website.

And I repeat.

There are many incidental costs that your business might incur that you can't exclude from the VAT calculation when you invoice your customers. These could include travelling expenses and your own postage costs. They aren't treated as disbursements for VAT purposes.

Any costs that your business incurs itself in the course of supplying goods or services to customers are not disbursements for VAT purposes. It's you, and not your customer, who purchases the goods or services, which are supplied to and used by your business.

It's up to you whether or not you itemise costs like these on your invoices. If you do show them separately when you invoice your customers then they're known as 'recharges', and not disbursements, for VAT. You'll have to charge VAT on them whether you paid any VAT or not.

Some examples of costs that could be recharges but are not disbursements include:

An airline ticket that you buy to visit a client or to travel to a job. If you recharge the cost to your client you must charge VAT because the flight was for you, not for the client. Postage costs you incur when you send letters to your customers. These are normal business costs and you must add VAT if you recharge them. A bank transfer fee you might incur when transferring money from your business account to a client's own account. Even though the bank's fee is exempt from VAT, if you recharge the fee you must charge VAT. This is because it was for a service provided to your business and not to your customer.

What is it that is unclear? And why won't Scott ring the number?

And if it's the disbursement word, a disbursement is a payment you make on your clients behalf and in their name.

Here we are talking of non disbursements.

Correct

So what you guys saying?

Its OK i am only kidding!

Scott Garner said:

---

Peter Riley said:

---

Well since it clearly states on HMRC's own website that you can not charge VAT to your customer for products/services which are VAT exempt, I think I'll stick to how I've been doing it for the last 19 years lads.

BTW: Good luck to you on your first VAT inspection! :-)

Scott.

So does that mean you're still charging VAT at 17.5% as it was in 1994?

Obviously not! Now you are just being facetious.

It's there in black and white on HMRC's page mate. Any further argument from you is pointless.

Scott.

3D Courier Services said:

---

I have been registered for vat since 1973, have had several vat inspections and had no problems. BUT just to be sure I rang the helpline Today. They confirmed what is clearly written on their website.

And I repeat.

There are many incidental costs that your business might incur that you can't exclude from the VAT calculation when you invoice your customers. These could include travelling expenses and your own postage costs. They aren't treated as disbursements for VAT purposes.

Any costs that your business incurs itself in the course of supplying goods or services to customers are not disbursements for VAT purposes. It's you, and not your customer, who purchases the goods or services, which are supplied to and used by your business.

It's up to you whether or not you itemise costs like these on your invoices. If you do show them separately when you invoice your customers then they're known as 'recharges', and not disbursements, for VAT. You'll have to charge VAT on them whether you paid any VAT or not.

Some examples of costs that could be recharges but are not disbursements include:

An airline ticket that you buy to visit a client or to travel to a job. If you recharge the cost to your client you must charge VAT because the flight was for you, not for the client. Postage costs you incur when you send letters to your customers. These are normal business costs and you must add VAT if you recharge them. A bank transfer fee you might incur when transferring money from your business account to a client's own account. Even though the bank's fee is exempt from VAT, if you recharge the fee you must charge VAT. This is because it was for a service provided to your business and not to your customer.

What is it that is unclear? And why won't Scott ring the number?

And if it's the disbursement word, a disbursement is a payment you make on your clients behalf and in their name.

Here we are talking of non disbursements.

Why don't you ring it again and specifically ask about charging VAT to your customer on a cost which you incur in the process of your job which is "VAT EXEMPT"!

VAT EXEMPT! Read those words out loud to yourself until they make sense!

If it is VAT EXEMPT, you don't pay VAT, so you DON'T charge VAT! For the love of God!

Scott.

This is definitely the end for me on this thread.

My head is too sore from banging it against a brick wall.

Scott.

Peter Riley said:

---

3D Courier Services said:

---

I have been registered for vat since 1973, have had several vat inspections and had no problems. BUT just to be sure I rang the helpline Today. They confirmed what is clearly written on their website.

And I repeat.

There are many incidental costs that your business might incur that you can't exclude from the VAT calculation when you invoice your customers. These could include travelling expenses and your own postage costs. They aren't treated as disbursements for VAT purposes.

Any costs that your business incurs itself in the course of supplying goods or services to customers are not disbursements for VAT purposes. It's you, and not your customer, who purchases the goods or services, which are supplied to and used by your business.

It's up to you whether or not you itemise costs like these on your invoices. If you do show them separately when you invoice your customers then they're known as 'recharges', and not disbursements, for VAT. You'll have to charge VAT on them whether you paid any VAT or not.

Some examples of costs that could be recharges but are not disbursements include:

An airline ticket that you buy to visit a client or to travel to a job. If you recharge the cost to your client you must charge VAT because the flight was for you, not for the client. Postage costs you incur when you send letters to your customers. These are normal business costs and you must add VAT if you recharge them. A bank transfer fee you might incur when transferring money from your business account to a client's own account. Even though the bank's fee is exempt from VAT, if you recharge the fee you must charge VAT. This is because it was for a service provided to your business and not to your customer.

What is it that is unclear? And why won't Scott ring the number?

And if it's the disbursement word, a disbursement is a payment you make on your clients behalf and in their name.

Here we are talking of non disbursements.

Why don't you ring it again and specifically ask about charging VAT to your customer on a cost which you incur in the process of your job which is "VAT EXEMPT"!

VAT EXEMPT! Read those words out loud to yourself until they make sense!

If it is VAT EXEMPT, you don't pay VAT, so you DON'T charge VAT! For the love of God!

Scott.

I'll say it again, Jesus H Christ on a ****ing BIKE!

He doesn't need to because the answer has been posted time and time again both by him and by me, quoting directly from the HMRC:

** It's up to you whether or not you itemise costs like these on your invoices. If you do show them separately when you invoice your customers then they're known as 'recharges', and not disbursements, for VAT. You'll have to charge VAT on them whether you paid any VAT or not.**

Let's just quote the important bit one more time for clarity:

You'll have to charge VAT on them whether you paid any VAT or not.

I do suspect you know you've been wrong and are just trying to wind us all up now.

I really despair.

Charging VAT to your customer for something that is VAT exempt is illegal.

How you invoice it doesn't matter.

What part of the black and white print on the HMRC page that I referenced for you don't you understand!

Scott.

That's why Transport for London don't charge VAT on the Congestion Charge, even though they are VAT registered.

It's also why McVities don't charge VAT on Jaffa Cakes even though they are also VAT registered!

So either you are wrong, or me, TFL and McVities are wrong?

Scott.

How are you not getting this?

You are not charging your customer for the congestion charge. You are only passing on the cost of it. Passing on the cost of something to your customer is not the same as selling it to him

Suppose I do a job from London to Scotland. On the way I get hungry and buy a pasty. As we all know, pasties are VAT exempt. Now let's say at the end of the journey I still have the pasty and the customer wants it, so I sell it to him. So on the invoice I would have to bill for it separately and not add VAT. That is clear. That is what you have been arguing all along, and is correct.

But suppose I did what was intended and ate the pasty, then decided to reclaim the cost of it in my bill. Now, when I add the four quid to the invoice (it was a big pasty) I DO add VAT, because I am not selling the pasty. I ate it myself, and used its nutritional goodness to sustain myself in the job I was doing. Doesn't matter whether I tell the client was the extra 4 quid was for or not - I am billing them for courier services only, and what I had to do or buy or eat in order to provide those services doesn't matter, my service is 100% VAT rated.

Peter Riley said:

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That's why Transport for London don't charge VAT on the Congestion Charge, even though they are VAT registered.

It's also why McVities don't charge VAT on Jaffa Cakes even though they are also VAT registered!

So either you are wrong, or me, TFL and McVities are wrong?

Scott.

No, again, because they supply the item/statutory fee/service direct.

TFL in effect produce the CC, it is their product, you use it yourself and do not sell it on therefore you must charge VAT.

McVitie's sell you the VAT exempt item, they don't provide you with a service where they eat the Jaffa Cake for you as far as I'm aware. The same as if you buy it from Tesco, Tesco buy it from McVitie's VAT free and sell it to you VAT free.

You produce or supply a courier service, not a VAT exempt item/product/service, if you manufacture or buy from a wholsesaler/manufacturer and then sell on VAT exempt items then you should not charge VAT.

MyVanCan.com said:

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I do suspect you know you've been wrong and are just trying to wind us all up now.

I'd have to concur, I simply cannot believe that you are still missing the point that everyone else can see as plain as day and 3D has clarified with HMRC's helpline. Either trying to wind us up or just unwilling to eat humble pie having been so insistant

MyVanCan.com said:

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How are you not getting this?

You are not charging your customer for the congestion charge. You are only passing on the cost of it. Passing on the cost of something to your customer is not the same as selling it to him

Suppose I do a job from London to Scotland. On the way I get hungry and buy a pasty. As we all know, pasties are VAT exempt. Now let's say at the end of the journey I still have the pasty and the customer wants it, so I sell it to him. So on the invoice I would have to bill for it separately and not add VAT. That is clear. That is what you have been arguing all along, and is correct.

But suppose I did what was intended and ate the pasty, then decided to reclaim the cost of it in my bill. Now, when I add the four quid to the invoice (it was a big pasty) I DO add VAT, because I am not selling the pasty. I ate it myself, and used its nutritional goodness to sustain myself in the job I was doing. Doesn't matter whether I tell the client was the extra 4 quid was for or not - I am billing them for courier services only, and what I had to do or buy or eat in order to provide those services doesn't matter, my service is 100% VAT rated.

You haven't told us what flavour pasty you bought, and your customer is a nosey git looking in your van for food.

Cornish flavour.

MyVanCan.com said:

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Cornish flavour.

Thank you.

Passing on the cost/selling it,

It's the same thing you numpty!

It's bloody VAT exempt and that's that!

Scott.

MyVanCan.com said:

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I do suspect you know you've been wrong and are just trying to wind us all up now.

I'd have to concur, I simply cannot believe that you are still missing the point that everyone else can see as plain as day and 3D has clari

fied with HMRC's helpline. Either trying to wind us up or just unwilling to eat humble pie having been so insistant

No, I have been 100% correct throughout this whole thread! The fact that you both are continually refusing to see what is right there in black and white ON THE HMRC PAGES and saying that I am wrong might lead someone else down the wrong path.

This is why I am being so adamant about this.

Now, I provided you with the link to the page which specifically tells you that you can NOT charge your customer VAT on top of a product/service (or even a cost which you pass on) if that cost is "VAT EXEMPT!".

I can lead a horse to water, but I can't make it drink!

Scott.

Free advice, you do what you normally do and leave everbody else to do what they do, if they get into bother then that's there tough look.

Scott answer me this

Lets take the congestion charge as our example

There is a job from Slough to EC2, i stick it on mtvan, you quote me £45 I ask whether that includes the con charge and you say yes

Your invoice to me is therefore £45 + vat (£9)= £54

IT IS NOT £35 + vat (£7) + con charge (£10) = £52

Your quote was £45, not £35 plus the con charge

I saw the funreal procession today, there was one guy out of step, or was it everyone else out of step and he was actually the one in step? I know what I think... What about you?

Speed Couriers (Stansted) said:

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Scott answer me this

Lets take the congestion charge as our example

There is a job from Slough to EC2, i stick it on mtvan, you quote me £45 I ask whether that includes the con charge and you say yes

Your invoice to me is therefore £45 + vat (£9)= £54

IT IS NOT £35 + vat (£7) + con charge (£10) = £52

Your quote was £45, not £35 plus the con charge

I saw the funreal procession today, there was one guy out of step, or was it everyone else out of step and he was actually the one in step? I know what I think... What about you?

The guy out of step had a stone in his shoe.

I'm watching James May's Things you need to know...

Did you know that human beings share 40% of their DNA with a cabbage?

He doesn't say which human beings though.

MyVanCan.com said:

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I'm watching James May's Things you need to know...

Did you know that human beings share 40% of their DNA with a cabbage?

He doesn't say which human beings though.

48% seems a bit low.

The crew I do most of my work for pay the con charge on first job into London nothing on the rest. The self billing invoice they give me has vat on top of everything. Probably because they are too lasy to do it different.

I think this once interesting thread has now petered out.

Personally, I think ask an accountant is the best suggestion.

Locked!