VAT / Tax Calculation?? Please help

smiley1986

I was reading through the forum and could not find any staright answer so i said id post my question here.

I am starting a new service an want to make sure I have my figures right.
I will be suppling a small monthly marketing service and

The service will cost €95 per month.
Of that €95, €65 will be cost to 2 freelancers and €30 profit.

Am I right in the following.
Total = €95 (VAT@ 21% = 19.95)
Expense = €65 (VAT@ 21 = 13.65)
Profit = 30 (VAT@21 = €6.30)

Since im registered for VAT i can claim back the VAT on the expense. So I would only have to pay €6.30 VAT to the revenue??

Further to this. To have a rough idea how much I come out with after Tax would the following be correct.
€30 (profit) minus €6.30 (VAT Profit) plus €13.65 (Reclaimed VAT on expense) = €37.35

If I had to pay tax at around 27% this would mean €37.35/100*73= €27.26 profit for me into my pocket?

Can you please let me know if that is correct. Thanks.

edwinkane

smiley1986 wrote: »

I was reading through the forum and could not find any staright answer so i said id post my question here.

I am starting a new service an want to make sure I have my figures right.
I will be suppling a small monthly marketing service and

The service will cost €95 per month.
Of that €95, €65 will be cost to 2 freelancers and €30 profit.

Am I right in the following.
Total = €95 (VAT@ 21% = 19.95)
Expense = €65 (VAT@ 21 = 13.65)
Profit = 30 (VAT@21 = €6.30)

Since im registered for VAT i can claim back the VAT on the expense. So I would only have to pay €6.30 VAT to the revenue??

Further to this. To have a rough idea how much I come out with after Tax would the following be correct.
€30 (profit) minus €6.30 (VAT Profit) plus €13.65 (Reclaimed VAT on expense) = €37.35

If I had to pay tax at around 27% this would mean €37.35/100*73= €27.26 profit for me into my pocket?

Can you please let me know if that is correct. Thanks.

You can claim back the VAT on expenses only if you have been charged VAT on expenses.

The form you have to submit to the VAT authorities ask you to add up the VAT you have charged on your sales invoices, and put that figure on the form. Then the VAT authorities ask you to add up the VAT you have paid on your purchase invoices, and put that on the form. The difference is the amount of VAT you have to pay (or be rebated if you have paid more VAT than you have charged).

smiley1986

yes i can claim vat back on the expenses so that would make my calculation right would it?

mari2222

customer pays 114.95, which is 95 + 19.95 vat
you pay 78.65, which is 65 + 13.65 vat
diff: 36.30, 30 profit and 6.30 vat
you owe the vat difference to revenue......6.30

if 30 profit is taxed at 27%, that leaves 21.90 for you.
dont forget prsi and levies.....

Jenos

smiley1986 wrote: »

I was reading through the forum and could not find any staright answer so i said id post my question here.

I am starting a new service an want to make sure I have my figures right.
I will be suppling a small monthly marketing service and

The service will cost €95 per month.
Of that €95, €65 will be cost to 2 freelancers and €30 profit.

Am I right in the following.
Total = €95 (VAT@ 21% = 19.95)
Expense = €65 (VAT@ 21 = 13.65)
Profit = 30 (VAT@21 = €6.30)

Since im registered for VAT i can claim back the VAT on the expense. So I would only have to pay €6.30 VAT to the revenue??

Further to this. To have a rough idea how much I come out with after Tax would the following be correct.
€30 (profit) minus €6.30 (VAT Profit) plus €13.65 (Reclaimed VAT on expense) = €37.35

If I had to pay tax at around 27% this would mean €37.35/100*73= €27.26 profit for me into my pocket?

Can you please let me know if that is correct. Thanks.

As far as I know your profit will be €30, which you will be taxed on. Because you are registered for VAT, all figures in your P & L will be vat exclusive.

tenchi-fan

smiley1986 wrote: »

yes i can claim vat back on the expenses so that would make my calculation right would it?

I think you're confusing your terminology.

1. You can claim back VAT on your inputs.

2. Expenses are tax deductible, and you pay tax on your profits.

Therefore, if the freelance people charge you VAT you can reclaim the VAT. You will still need to add 21% VAT to your sales, but you can reclaim the VAT from your inputs assuming VAT was charged.

My only concern is that your freelancers are working for cash in hand or aren't registered for VAT.

The profit figure is separate. Here, you take your income, less all your expenses, and pay tax on your profits.