What VAT rate should I be charging?

Howdy do folks.


Bit of a silly question perhaps, but I just registered for VAT at the start of this year and will be issuing invoices with it attached soon enough.

I'm a pro photographer and I provide a service, rather than supply a product (ie; you hire me to shoot things for you, you don't buy prints or artwork off me). I always had it in my head that products were 23% and services were 13.5%. But I appear to be mistaken on this.

Would I be correct in saying, I should be charging 23%? Despite offering only a service and no tangible products.

Again, I appreciate this is probably an overly simple question, but i just figured I'd seek out some clarity instead of assuming


Cheers folks.


EDIT: Also, sorry to ask another silly question, but as someone who is dreadful with managing money, I'll likely get about half a dozen substantial payments each year. Can I ring Revenue up out of the blue every time i get a decent VAT payment in, and pay it over to them straight away to get rid of it? Or must I hide it away and pay it all at one time each year?

Stratvs

You need to read Revenue's guide on photography supplies / services and the impact of the different rates of VAT.

https://www.revenue.ie/en/tax-professionals/tdm/value-added-tax/part03-taxable-transactions-goods-ica-services/Goods/goods-photography.pdf

Depending on what is done / supplied the reduced rate (13.5%) or the standard rate (23%) may apply.

If you have registered for VAT then you must file the returns and pay whatever is due at the appropriate times for the frequency of returns. Initially it is likely, having just registered, that you will be on bi-monthly returns. So Jan-Feb 2020 must be completed and filed by 19/03/2020 ( payment extended to 23/03/2020 for ROS payments )
As a new registrant you must pay and file via ROS.

Stratvs

Sorry i should probably clarify, i actually do have an accountant. I am just working oddball hours this week and last and won't be awake during business hours, so getting hold of him won't be too handy (and it was annoying me googling it over and over haha).


Can I ask, Stratvs, in relation to this part...

Stratvs wrote: »

you must file the returns and pay whatever is due at the appropriate times for the frequency of returns

Does that mean I don't actually have the option of simply just making one payment at the start of 2021 for all of my 2020 income (this is what I've been doing the past few years).


Thank you for the response. Appreciate it greatly.

thegolfer

[Deleted User] wrote: »

Sorry i should probably clarify, i actually do have an accountant. I am just working oddball hours this week and last and won't be awake during business hours, so getting hold of him won't be too handy (and it was annoying me googling it over and over haha).


Can I ask, Stratvs, in relation to this part...




Does that mean I don't actually have the option of simply just making one payment at the start of 2021 for all of my 2020 income (this is what I've been doing the past few years).


Thank you for the response. Appreciate it greatly.

What ever VAT you collect in the bimonthly periods you have to pay this over 23 days after the end to that period.

There is no estimate available.

You can go on a monthly debit plan but if your liability is different or sways vastly then it's not practical.

thegolfer

thegolfer wrote: »

you have to pay this over 23 days after the end to that period

I'm not sure if the oddball hours I'm doing are messing with my head, or if I'm just getting a mental blank reading that sentence. Do you effectively mean pay it within 23days?


(ie; if i charge you vat, and you pay me today, i can ring up revenue and pay them today, too, and get it all done in one go?).

wally1990

If a bi monthly period is January and February

For Vat collected during that period you have until the 23rd of March to pay via ROS

So deadline is the 23rd day after the end of a bi monthly period

If the period is November and December 2020 then you have until 23rd of Jan 2021 and so on

wally1990

wally1990 wrote: »

If a bi monthly period is January and February

For Vat collected during that period you have until the 23rd of March to pay via ROS

So deadline is the 23rd day after the end of a bi monthly period

If the period is November and December 2020 then you have until 23rd of Jan 2021 and so on

If I get paid once on January 10th and once on February 10th, can I pay revenue on the 11th of each month (the day after I get paid with the respective VAT amount) or must I wait until that bi-monthly period ends before I'm allowed hand over the money?


Thanks for your help by the way, it's appreciated

davindub

Deleted User wrote: »

I'm not sure if the oddball hours I'm doing are messing with my head, or if I'm just getting a mental blank reading that sentence. Do you effectively mean pay it within 23days?


(ie; if i charge you vat, and you pay me today, i can ring up revenue and pay them today, too, and get it all done in one go?).

23 days after the VAT period ends.

Most businesses are on bimonthly so will be making a return for January and February by the 23rd of March.

An accountant will manage this for you, it would be advisable to engage one if finance is not your strong point. Just get something like Xero to do your invoicing and get the accountant to reconcile bank, DRS and give them your purchase invoices to post. We do this for many clients who originally started off trying it themselves but simply don't have the training or time to spend making sure everything is correct.

Stratvs

Deleted User wrote: »

I just registered for VAT at the start of this year and will be issuing invoices with it attached soon enough.

Deleted User wrote: »

Does that mean I don't actually have the option of simply just making one payment at the start of 2021 for all of my 2020 income (this is what I've been doing the past few years).

You're mixing up filing VAT returns and Income Tax Returns.
You'll file the VAT at the frequency and dates of payment they dictate.
You will still file your tax return annually.

I do suggest you have a short chat with your accountant who will put this all straight for you.

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Eliseo Spoiled Manicure

Eliseo Spoiled Manicure wrote: »

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Helpful, thank you.

tanit

Deleted User wrote: »

If I get paid once on January 10th and once on February 10th, can I pay revenue on the 11th of each month (the day after I get paid with the respective VAT amount) or must I wait until that bi-monthly period ends before I'm allowed hand over the money?


Thanks for your help by the way, it's appreciated

As Stratvs says do not mix Vat with Income Tax (first one is bimonthly and second one is annual)

Also if you are within the limits for Cash Basis (and most start up and small business would be) you can avail of the Cash Basis for VAT:

You will accounting on your return and paying for the Vat on Sales on the date of the payment and for the amounts paid to you. Purchases will be included in your return on an invoice basis (the date of the invoice).

This will help with cashflows issues for Vat returns. Just make sure your accountant is using Cash Basis for Vat purposes (they are more than likely doing it right now, but just check with them)