VAT question

Chochese

Hi all,

I set up as self employed during the summer and I am registered for VAT. Each time I get an invoice paid, I put the VAT + 25% of the invoice amount (to cover taxes) into a separate account.

My query is as follows: Say I charge €1000 VAT in a period but I spend €200 VAT on expenses, thus leaving a balance due of €800. As I have been putting all the VAT I took in into an account, I have the balance of €200 left over after payment.

Is this balance of €200 free to be put back into the business for regular use?

Any help on the matter is greatly appreciated!

nompere

This is what one of my partners calls "jam-jar" banking!

But yes -- the €200 is available to use in the business. You've already paid the €200 from your general account when you paid the expenses and the VAT on the expenses.

Chochese

Excellent, thanks nompere!

That's just free'd up an extra few quid to get me some equipment