Maths question

[GROWLER]

Ah, so it's not 6.5% of 15% but 6.5% VAT repayable.  That's just under half, 43.33% recurring of the VAT collected.

THAT'S IT!!!  ............

I think? 

[Barman]

Maths isn't and never has been my bestsest subject.

I've recently become registered to the VAT club, on the flat rate scheme, and accordingly I have to pay 7.5% of the VAT that I collect, only for the first year I only pay 6.5 %.
The downside is that I don't claim any VAT back unless it's a large purchase.
 I'm still going to be slightly 'up' at the end of the year though I estimate.

Anyway, to save me ringing the VAT office up, how the hell, and what is the formula for working out 6.5% of 15.0%. as I have to do my first return for the end of this month?

It'll be another calculation in January when the VAT goes back up to 17.5%, but they haven't yet told me what I'm going to have to pay...problee 9% I'd have thought.

?130.44 divided by 100 and times 6.5 makes ?8.48 (rounded up).

That can't be right surely?
It must be just under half of what I'd pay if the full 15% was due, surely? Roughly 60 instead of 130 pounds...me pound symbol has gone AWOL again.

It depends if you are paying 6.5% of the full amount or 6.5% of the VAT amount...

If you are saying that you only pay VAT at 6.5% then it is a different calculation....

[Nick]

This is not going well, is it?
 

[Snoopy]

Maths isn't and never has been my bestsest subject.

I've recently become registered to the VAT club, on the flat rate scheme, and accordingly I have to pay 7.5% of the VAT that I collect, only for the first year I only pay 6.5 %.
The downside is that I don't claim any VAT back unless it's a large purchase.
 I'm still going to be slightly 'up' at the end of the year though I estimate.

Anyway, to save me ringing the VAT office up, how the hell, and what is the formula for working out 6.5% of 15.0%. as I have to do my first return for the end of this month?

It'll be another calculation in January when the VAT goes back up to 17.5%, but they haven't yet told me what I'm going to have to pay...problee 9% I'd have thought.

?130.44 divided by 100 and times 6.5 makes ?8.48 (rounded up).

That can't be right surely?
It must be just under half of what I'd pay if the full 15% was due, surely? Roughly 60 instead of 130 pounds...me pound symbol has gone AWOL again.

Exactly my point. BM is right if the assumption that you pay only 6.5% of the total VAT Payable is correct BUT if you are supposed to pay VAT at 6.5% on the total charged (as opposed to 15%) then the figure would indeed be nearer half the 15% amount.

[GROWLER]

U.M. is on the same track here.
6.5% VAT payable to the VAT man , that's has been collected... invoiced but not yet received, that's another scheme I'm on... NOT 6.5% of 15% as that would be ridiculously minimal.

Simpes really, but I just need to werk out the figure, and for that i simply need a probably simple but so far illusive formula.

For instance, at the current rate, if I receive 15 pounds VAT from one of my customers, I onl pay the VAT man 6.50 of it, BUT for instance, I don't claim back 15 pounds VAT paid by me  if I purchase something for 100 pounds + #15 VAT  in connection with my business.

Where's me ####### sign gone!

[Nick]

Pastis is here.

[Snoopy]

U.M. is on the same track here.
6.5% VAT payable to the VAT man , that's has been collected... invoiced but not yet received, that's another scheme I'm on... NOT 6.5% of 15% as that would be ridiculously minimal.

Simpes really, but I just need to werk out the figure, and for that i simply need a probably simple but so far illusive formula.

Like the old X 7/47.
Can't find one on the www so perhaps the VATman enquiry desk could give it to you ~ they are the ones that supplied the 7/47 calculation saying that it was more accurate than using a calculator to +17.5%

[Uncle Mort]

So, Growler sell a widget for ?100, charges VAT @ 15% and so the customer pays Growler ?115.

Growler owes HMRC 6.5% VAT which on ?100 is ?6.50. But if he applies 6.5% to the amount received of ?115 that's ?7.48 so he needs to know ?6.50 as a percentage of ?115. That is 5.65%. Thus Growler needs to pay HMRC 5.65% of the monies received.

[Nick]

But he doesn't sell widgets 

[Pastis]

http://www.accountingissue.info/vat-calculate-percentage-fraction.html

Scroll down to the tables 

[GROWLER]

But he doesn't sell widgets 

I do a neat little number in JCB hire and patio excavation though. 

[GROWLER]

http://www.accountingissue.info/vat-calculate-percentage-fraction.html

Scroll down to the tables 

Oh dear. I know you mean well Pasties, and for that I thank you, but I'm struggling to get ny head around that lot.
I'll keep reading it and it might suddenly click.

Quite simply, on this scheme, if I collect 100 pounds VAT, I only pay the VAT man 65 pounds fifty pence of it, and the remainder of it (34.50 ) is set against what I haven't claimed for in VATable purchases in connection with my business.

[Nick]

This is like watching a car crash in slow motion 

[Pastis]

As I read it if you're on the 6.5% rate then that's what you apply on your invoices to your customers. Yes? When you come to fill in your VAT form that's just totalling up all the VAT you've collected in the time frame.

The trickier bit (which is why I found the VAT fraction tables) is how you calculate what you can reclaim during the period and for your 6.5% rate the fraction is 13/213 i.e. multiply the bill total by 13, divide by 213 and you'll have the amount you can reclaim.

Of course, I could have got it all wrong ...  

[GROWLER]

Have I just sorted this?

Simply multiply the amount of VAT received by 6.5%/

100 pounds (VAT received from a customer) X 6.5% = 6.5, move the decimal point over and voila, 65 pounds!!!

Is that right?