Q about VAT:13.5% or 21%

rolion · 28-02-2011 11:30PM #1

Hi all.
Another quick q re VAT charges...
As an IT Consultant,sometime i do consultancy and sales followed by support or maintenance OR some other time pure support and maintenance.
Checked Revenue web site and they mention about Computer Hardware Repair at reduced rate ,13.5%
Other Computer related activities are at Standard 21%.

My Q are:

-how do i balance repair/maintenance with consultancy and sales ?
-so,an installation of third party supplied systems or hardware is that maintenance / repair or sales ?
-installation of a software/online solution,is that software upgrade/repair ?
-training supplied to schools or end users for installed solution (hardware or software) is that reduced or standard ?

Any one in the same boat please !?
I'm asking couse i'm dealing with few schools and they can't claim back.
For most of my business clients is maintenance contracts so that ...is going to be 13.5% or 21 % ?

Thanks in advance...

dbran · 01-03-2011 01:29PM

Hi Roilion

This is a technical area and you should consult your accountant about this as there may be specific issues with your business you have not said here.

However here are some pointers for you.

The provision of computer training is EXEMPT which means you don't charge VAT but cannot recover the VAT or proportion of VAt incurred in providing the service.

The installation download upgrade of software would be at 21%.

If you are fixing the hardware itself, it is at 13.5%. But if you supply replacement hardware it it 21%.

Where you provide two or more services to the customer and they are seperate and distinguishable, then you must seperate out each service and charge the VAT out on each at the different appropriate rates.

If they are indistinuishable ie supply and fit a new hard disk, then it is subject to the 2/3rds rule. The supply of the hard disk is at 21% but the installation of it is repair and is at 13.5%. So if the installation constitutes more then 2/3s of the value of the sale the VAt rate is 13.5% on the entire value of the sale. This is notwithstanding that the supply of the hardware is at 21%.

Hope this helps

dbran

rolion · 02-03-2011 01:52PM

Thanks,is just getting better...very hard to implement it in the real life as hware & sware issues are linked together.
I reckon i will charge schools reduced rate and the business standard rate.
For schools,is more maintenance than consultancy or sales or follow-ups.
For business is more consultancy and sales than hardware repairs.
I hope it will make sense for VATman...

Thanks for you answer...
Regards.

Kinetic^ · 02-03-2011 03:17PM

rolion wrote: »

Thanks,is just getting better...very hard to implement it in the real life as hware & sware issues are linked together.
I reckon i will charge schools reduced rate and the business standard rate.
For schools,is more maintenance than consultancy or sales or follow-ups.
For business is more consultancy and sales than hardware repairs.
I hope it will make sense for VATman...

Thanks for you answer...
Regards.

You can't pick and choose what rate you charge someone based on what sort of entity they are, you'll land yourself a VAT bill that will end up coming out of your own pocket and eradicating any profit you've made.

I'm in the same situation as yourself and my VAT is as follows:

Repairs/callouts/installations fees are at 13.5%.

Software/hardware sales (laptops/microsoft office etc) are at 21%.

I've a good accountant and has set me up with decent tax planning, I suggest you speak to yours or if you don't have one, get 1 asap.

Q about VAT:13.5% or 21%

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