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Tax Due ???

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  • 18-10-2012 6:54pm
    #1
    tigerlily01
    Registered Users Posts: 51 ✭✭


    Im a trades man who is about to start my own business , its a small electrical business so i dont want to register for Vat

    My questions is when I do a job and I supply the lights , I write the invoice up and put Say ... Supply of light fitting €100 + Labour €70 = €170

    My question is will I have to pay tax on the full €170 ?

    I only supplied the light , the labour is what I think I need to pay tax on but Im sure how to approach this . I dont want to engage an accountant at the moment so if someone could give me some guidaance Id really appreciate it


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    #2
    Duckjob
    Registered Users Posts: 2,859 ✭✭✭Duckjob


    tigerlily01 wrote: »
    Im a trades man who is about to start my own business , its a small electrical business so i dont want to register for Vat

    My questions is when I do a job and I supply the lights , I write the invoice up and put Say ... Supply of light fitting €100 + Labour €70 = €170

    My question is will I have to pay tax on the full €170 ?

    I only supplied the light , the labour is what I think I need to pay tax on but Im sure how to approach this . I dont want to engage an accountant at the moment so if someone could give me some guidaance Id really appreciate it


    You only pay tax on your profit, and normally PROFIT = SALES - COST OF SALES.

    So, in your example, assuming the light fitting cost you €100 to supply, then your SALES is €170 and your COST OF SALES is €100, so you only pay tax on the €70. In your accounts, you would have a sales invoice for €170 that you issued to the customer, and you would need to have a purchase invoice to show the taxman that you spent €100 on the materials to do that job.


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    #3
    Compton
    Registered Users Posts: 3,157 ✭✭✭Compton


    Are you sure you don't pay 13.5% of the €170 and you can claim the 23% from the purchase of the lightbulb?


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    #4
    The Apprentice
    Registered Users Posts: 1,130 ✭✭✭The Apprentice


    Heres a breakdown i think duckjob is right ..

    http://www.tutor2u.net/business/gcse/finance_profit_and_loss_account.htm


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    #5
    nompere
    Registered Users Posts: 1,678 ✭✭✭nompere


    Compton wrote: »
    Are you sure you don't pay 13.5% of the €170 and you can claim the 23% from the purchase of the lightbulb?

    Those are VAT amounts - and the OP says he insn't registered for VAT.


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    #6
    retenzo12
    Registered Users Posts: 124 ✭✭retenzo12


    why would someone not register for VAT. Surely those registered for VAT can be more competitive?no?


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    #7
    Axwell
    Moderators, Computer Games Moderators Posts: 10,462 Mod ✭✭✭✭Axwell


    retenzo12 wrote: »
    why would someone not register for VAT. Surely those registered for VAT can be more competitive?no?

    Depends on your business and your turnover. If you are registered for VAT you have to factor that into your price and charge a client the extra 23%, if I am not registered for VAT I dont so my price is more competitive to the client. But then I cant claim VAT back on purchases etc so there are advantages and disadvantages of both.


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    #8
    kennyb3
    Registered Users Posts: 6,724 ✭✭✭kennyb3


    Axwell wrote: »
    Depends on your business and your turnover. If you are registered for VAT you have to factor that into your price and charge a client the extra 23%, if I am not registered for VAT I dont so my price is more competitive to the client. But then I cant claim VAT back on purchases etc so there are advantages and disadvantages of both.

    Pretty much that.

    Again you just have to watch the turnover limits


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