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Charging vat as a tradesman

  • 01-10-2013 9:42pm
    #1
    Oral Slang
    Registered Users, Registered Users 2 Posts: 1,519 ✭✭✭


    Hi, just wondering if someone could help clarify something for me, trying to help out a startup business.

    Should a tradesman that is registered for vat charge 13.5% vat on an entire bill, or break it up into 13.5% for labour & 23% for materials? Someone said to me that they should charge 13.5% for the entire bill & then they can claim the 23% back on materials?


Comments

  • #2
    Citizenpain
    Registered Users, Registered Users 2 Posts: 2,005 ✭✭✭Citizenpain


    Oral Slang wrote: »
    Hi, just wondering if someone could help clarify something for me, trying to help out a startup business.

    Should a tradesman that is registered for vat charge 13.5% vat on an entire bill, or break it up into 13.5% for labour & 23% for materials? Someone said to me that they should charge 13.5% for the entire bill & then they can claim the 23% back on materials?

    Look up the two thirds rule. If cost of labour is more than 2 thirds of total cost ex vat charge 13.5% vat.


  • #3
    barneystinson
    Registered Users, Registered Users 2 Posts: 4,685 ✭✭✭barneystinson


    Citizenpain wrote: »
    Look up the two thirds rule. If cost of labour is more than 2 thirds of total cost ex vat charge 13.5% vat.

    I think you might need to look it up too..! :p

    The rule is if labour cost more than 1/3 of total cost you charge the 13.5%. Only if materials cost more than 2/3 do you charge 23%.


  • #4
    Citizenpain
    Registered Users, Registered Users 2 Posts: 2,005 ✭✭✭Citizenpain


    barneystinson wrote: »
    I think you might need to look it up too..! :p

    The rule is if labour cost more than 1/3 of total cost you charge the 13.5%. Only if materials cost more than 2/3 do you charge 23%.

    Oops... Failed at Engaging brain late at night


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