Vat

EmthiEmthi Feels At HomeRegistered Posts: 53
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.

Comments

  • BluewednesdayBluewednesday Font Of All Knowledge Registered Posts: 1,624
    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.
  • qwertyqwerty Feels At Home Registered Posts: 82
    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).
  • EmthiEmthi Feels At Home Registered Posts: 53
    VAT exclusive

    that is the amount vat excl.
  • AK002AK002 Font Of All Knowledge Registered Posts: 2,492
    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.
  • PsychePsyche Well-Known Registered Posts: 187
    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.
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