Vat

Emthi

I am doing VAT for a restaurant. He purchases most of the things at 0% rated (meat, veg etc) but when he sells as a meal, as we all know, he has to put standard rate (15%).

He has purchased the things for £35,000 and the vat he paid £700. The turnover for the quarter was £60,375. If we calculate the vat at standard rate it is going to be £9056.25. So the vat payable is £8356.25, which is a big amount. What are the treatments we can apply? Appreciate your comments.

Bluewednesday

You could look at the VAT flat rate scheme but I doubt he will be better off on that - it's worth checking though!

I have a similar case with a fish and chip shop and it's just unfortunate because it's the way that it is and big VAT bills are the norm.

qwerty

I notice you have stated the turnover of £60,375 as VAT exclusive. Is this correct, as my experience of this type of business is that they provide a VAT inclusive takings figure and VAT is then calculated from that (e.g. Takings £60,375 X 3/23 = £7,875.00 VAT).

Emthi

VAT exclusive

that is the amount vat excl.

AK002

Bluewednesday wrote: »

You could look at the VAT flat rate scheme but I doubt he will be better off on that - it's worth checking though!

I have a similar case with a fish and chip shop and it's just unfortunate because it's the way that it is and big VAT bills are the norm.

Only up to £150k are you allowed to use the FRS.

Psyche

Your client could go with the annual accounting scheme, where they would pay monthly instead of quarterly. That would be smaller chunks to pay all at once.