VAT Flat Rate scheme + CIS Deductions

Sandy Dog

Please will someone let me know whether the calculations below are correct or not? My main concern is whether the P&L account should show the VAT Flat rate element or simply the Net Sales less VAT Flat Rate element.

An electrician whose VAT flat rate is 9.5% carries out work for a main contractor.

INVOICE
Labour incl Emp’s NIC 60.00
Materials incl VAT 30.00
Mark-up 10.00
Value of Work 100.00
VAT @ 20% 20.00
Value of Work + VAT 120.00
CIS Deduction - Labour 60.00 x 20% (12.00)
Payment Due from Main Contractor 108.00


VAT Flat Rate Liability
Sales (incl VAT) 120.00
VAT Flat Rate 9.5%
VAT Liability 11.40


VAT Charged to Client 20.00
VAT liability (11.40)
“Profit” on VAT 8.60


Profit and Loss account
Sales incl VAT 120.00
VAT Flat Rate element (11.40)
Sales less VAT Flat Rate element 108.60
Cost of Sales – Lab 60.00 + Mat 30.00 (90.00)
Gross Profit 18.60
Expenses (0.00)
Net Profit (for Income Tax) 18.60

Simplistic Income Tax Calculation
Net Profit 18.60 x 20% 3.72
Rebate for CIS deduction (20.00)
Income tax refund due (16.28)

FoxAccountancyServices

Looks fine to me, tho I'd show it as £100 sales plus £8.60. I normally adjust sales with the VAT saving, but you can also show separately if you wish.

FoxAccountancyServices

Ps... Not been heavily involved with CIS but should it include mark up as well as labour?