How is VAT relief calculated in your Monthly returns?

gaatipstr

Hi all, Sorry if I'm asking a bit stupid.

Im a sole trader the past few months and have been getting my accountant to do my VAT returns. What i want to know is, say for example i owe €1000 in VAT for March/April and I have about €400 in diesel receipts. How much do I actually owe in VAT or how do I go about calculating it?

Thanks

Manofthewest

The VAT due/refunded is calculated by taking the VAT on your Sales less the VAT on your purchases for the period in question.

If the VAT on your sales is greater than you pay VAT to the Revenue if VAT on your purchases is greater then you are due a refund.

gaatipstr

Thanks for reply. I know what way it works, Im just wondering how do i calculate it all. Like say i owe €1000 in VAT and i have €400 in expenses i obviously owe the revenue money but How much of a relief to i get off the €1000.

Is it just a simple 23% of the expenses or what?

namenotavailablE

If you have the VAT receipts for diesel they should state the amount and rate of VAT. You can't claim VAT on expenses if you don't have these receipts.
Assuming that the €400 is the total amount paid out (ie it includes the VAT already) then the VAT on diesel is €400 x 23/123 = €75. If the €400 is the pre-VAT value, the amount of VAT is €400 x 23% = €92.
You'd deduct the €75/ €92 VAT from the VAT on sales.

In both cases, note that I'm assuming the VAT rate on diesel is 23%- I don't know what it is so you'd need to check that first from the receipts.

IrishGeordie

It ain't!