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tax..warning extremely boring but pertintent points included.

false prophet Avatar
8y, 3m agoPosted 8 years, 3 months ago
ok i do this in my spare time im sad no appologies.



monday morning a man is paid £1,000 of which he pays 20% tax,leaving £800.
he goes to local hi-fi store to buy a plasma for £800 of which 17.5% is tax leaving £660.
the hi-fi store owner claims the £660 as earnings paying 20% income tax leaving £528
during lunch he goes to a furniture store to but a settee for £528 of which 17.5% is vat leaving £435.
the furniture stoe guy pops into john lewis at 1 pm to buy a new bed with his £435,of which 17.5% is taxed leaving £358.john lewis pay his worker £358 at 1.15 pm including 20% income tax leaving £286.the worker goes to argos to buy a ps3 at 1.30 pm.costing £286 of which 17.5% is vat leaving £235.

in the space of an afternoon almost %80 percent has been returned in tax.

by half past 5 the goverment mst almost have it all back.

any references to john lewis are strictly unintentional,i just had them on a second tab.
false prophet Avatar
8y, 3m agoPosted 8 years, 3 months ago
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#1
Too true! :thumbsup:
#2
this is why accountants never go bust - :thumbsup:
#3
the evolution of life ::

born (taxed somewhere??)
work pay tax
die pay tax
#4
umm, this is true. But no one does anything about it do they lol.

Tax returns are early this year, unless you doing it online. They are trying to phase out accountants.

Im going to canada if they will let me in!
#5
So income tax is paid at 20% and VAT at 17.5 %.
The workers could have chosen to save or invest rather than spending or they could have bought non-VAT items. Taxes are used to fund public services - how well is another matter.
#6
Wrong on so many levels. Tax just doesn't work like that if you're running a business.
#7
how would the math work on petrol at 70% tax?

obviously it is naeive but not far off,i doubt someone working 9-5 knows tax breaks.

mind you at one point income tax was 98%
banned#8
ok i do this in my spare time im sad no appologies


you might want to do some reading up on tax and VAT too as its rubbish

edit just seen your post above

your vat calcs are completely wrong
so are your income tax ones
sorry
#9
"(If you drive a car car), I’ll tax the street,
(If you try to sit sit), I’ll tax your seat,
(If you get too cold cold), I’ll tax the heat,
(If you take a walk walk), I’ll tax your feet.
Taxman."

Remember that from the examples in the original post, someone has received a plasma tv, someone a sofa, someone a bed, someone else a ps3, so that initial £1,000 actually went quite far ;)
banned#10
don't have time to work it out, but heres roughly where you went wrong

monday morning a man is paid £1,000 of which he pays 20% tax,leaving £800.
he goes to local hi-fi store to buy a plasma for £800 of which 17.5% is tax leaving £660.

660 + 17.5% isn't 800, you also forgot, he will have claimed back the VAT on the original purchase

the hi-fi store owner claims the £660 as earnings paying 20% income tax leaving £528

unless he had got the tv for free, and had no other costs then the most he would pay tax on would be the profit.

etc
#11
personal use.this thread just got me thinking about our goverment.£25 billion to save nothern rock,but they let rover go after denying them a £1 million loan.grr.

noting to do with the post tho,

£800 -17.5% =660

he dosent pay the vat to start only the consumer pays vat.
#12
false prophet
personal use.this thread just got me thinking about our goverment.£25 billion to save nothern rock,but they let rover go after denying them a £1 million loan.grr.

noting to do with the post tho,

£800 -17.5% =660

he dosent pay the vat to start only the consumer pays vat.


so where does the VAT man come into this then?

Correct me if im wrong, its been a long time . ..

Company pays VAT on its trade purchases. It then has to charge VAT on its purchase,

Yes, the company can claim VAT back, but only on the trade value, so for example, if a trade item is £1000, the VAT is £175.00

Lets say that the item sells for £1500 retail, the total including VAT on this is, £1762.50 - Now, take off the price of the product, and leave the VAT - Which is £262.50

Even tho the company pays the original £175.00 trade VAT, they claim this back. But then they have to pay the sale difference in VAT to mr Vatman! - Which is £262.50 minus £175.00 which makes = £87.50

So, on this £1500 product, the government makes £350.00

As well as the Vatman, the business has to pay a profit tax. Ouch!
banned#13
If the purchase price was £800, the the VAT was £119.15, not £140

the simple way to work out how much the vat was you divide the purchase price by 1.175, then minus that from the purchase price, you don't minus 17.5%

( 100 / ( 100 + [VAT Rate] ) * [Final Price] = [Pre-VAT Price]
banned#14
aircanman
so where does the VAT man come into this then?

Correct me if im wrong, its been a long time . ..

Company pays VAT on its trade purchases. It then has to charge VAT on its purchase,

Yes, the company can claim VAT back, but only on the trade value, so for example, if a trade item is £1000, the VAT is £175.00

Lets say that the item sells for £1500 retail, the total including VAT on this is, £1762.50 - Now, take off the price of the product, and leave the VAT - Which is £262.50

Even tho the company pays the original £175.00 trade VAT, they claim this back. But then they have to pay the sale difference in VAT to mr Vatman! - Which is £262.50 minus £175.00 which makes = £87.50

So, on this £1500 product, the government makes £350.00

As well as the Vatman, the business has to pay a profit tax. Ouch!


I don't understand that - where do you get the £350 from?

The total vat that will be paid on a product is the final sale vat - simply put

Say company A sells to company B at £500 + VAT (£87.50)
Company B sells to customer at £1000 + VAT (£175.00)

Company A pays goverment £87.50
Company B collects £175 from customer in VAT

In VAT return they will marks they owe £175
but they also claim back £87.50
so they send a cheque for the difference (£87.50)

So goverment have had cheque from A for £87.50 and cheque from B for £87.50, total of £175.00, which is the exact VAT charged at the last point of sale.
#15
colinsunderland
I don't understand that - where do you get the £350 from?

The total vat that will be paid on a product is the final sale vat - simply put

Say company A sells to company B at £500 + VAT (£87.50)
Company B sells to customer at £1000 + VAT (£175.00)

Company A pays goverment £87.50
Company B collects £175 from customer in VAT

In VAT return they will marks they owe £175
but they also claim back £87.50
so they send a cheque for the difference (£87.50)

So goverment have had cheque from A for £87.50 and cheque from B for £87.50, total of £175.00, which is the exact VAT charged at the last point of sale.


Ok, retailer buys product for £1000 - The retailer gets charged £175 VAT on this, which he claims back. So retails is zero so far.

Retailer wants to make some money on this, so they sell item for £1500 + VAT, which is £1762.50

Ok, now. When the item is sold, the customer pays £262.50 in VAT. Now, the retailer has to pay the difference in the trade vat, and the retail vat, to the vatman. This is how the vatman makes his money. Difference is £87.50 - so, the total going to my brown is £350

I think where we have crossed wires is, you are talking from the retailer point of view, im talking about the total amount going into governments pockets.
banned#16
the retailer doesn't pay vat twice, he pays the £262.50 and nothing else
the goverment get £262.50
#17
aircanman
Ok, retailer buys product for £1000 - The retailer gets charged £175 VAT on this, which he claims back. So retails is zero so far.

Retailer wants to make some money on this, so they sell item for £1500 + VAT, which is £1762.50

Ok, now. When the item is sold, the customer pays £262.50 in VAT. Now, the retailer has to pay the difference in the trade vat, and the retail vat, to the vatman. This is how the vatman makes his money. Difference is £87.50 - so, the total going to my brown is £350

I think where we have crossed wires is, you are talking from the retailer point of view, im talking about the total amount going into governments pockets.


-£175?
#18
colinsunderland
the retailer doesn't pay vat twice, he pays the £262.50 and nothing else
the goverment get £262.50


Quote from bbc website about vat

The amount owed to Revenue and Customs is the difference between your output tax and input tax. Output tax is the VAT charged to your VAT-registered customers, and VAT charged by suppliers to your business is your input tax.

Business has to pay this difference, and the vat. retailer does not pay vat twice, only once, but the vatman takes the said difference.
#19
For items which are standard rated or reduced rated for VAT, VAT is charged to the buyer (output tax) by the VAT registered seller. This VAT is reclaimed by the VAT registered buyer (input tax) after goods and services are purchased.

If you are registered for VAT generally you charge VAT on your business sales and reclaim VAT on your business purchases. The difference between the VAT you charge and the VAT you are reclaiming is the amount of VAT you must pay to HMRC. If the value of the VAT you reclaim is more than the value of the VAT you charge, then HMRC pays you.

If you are not registered for VAT, you do not charge VAT on your sales. You still pay VAT on your purchases and you cannot reclaim this VAT.

You usually account for VAT on a quarterly basis by filling in a VAT return and submitting it to HMRC. You then pay HMRC the excess of your output tax over the VAT you can reclaim as input tax. If the input tax you can reclaim is more than your output tax, you can reclaim the difference from HMRC.
banned#20
aircanman
Quote from bbc website about vat

The amount owed to Revenue and Customs is the difference between your output tax and input tax. Output tax is the VAT charged to your VAT-registered customers, and VAT charged by suppliers to your business is your input tax.

Business has to pay this difference, and the vat. retailer does not pay vat twice, only once, but the vatman takes the said difference.


and where does it say they have to pay the difference and the vat charged on the final sale?

The amount owed to Revenue and Customs is the difference between your output tax and input tax.


That is all the retailer pays
#21
So the retailer has paid his supplier £175 originally, taken £262.50 from the buyer and now owes £87.50 of that to the government, £175 of the buyers VAT goes into his pocket to offset his original VAT payment to his supplier. Simple :)
banned#22
Shengis
So the retailer has paid his supplier £175 originally, taken £262.50 from the buyer and now owes £87.50 of that to the government, £175 of the buyers VAT goes into his pocket to offset his original VAT payment to his supplier. Simple :)


exactly
the retailer doesn't pay £262.50 + £87.50
#23
The bit I find most interesting on VAT is on non resalable items, fuel, building costs (driveway repairs) etc. Nice little scam can be had there if its for 'business use' :lol:

Still can't get my head round how that works......
banned#24
[email protected]. you got owned

PS. hey Shengis
#25
imranmaz
PS. hey Shengis


Hey yourself, you've caught me on my last night here for a while. Moving tomorrow so it's going to take a while to sort out my internet (ok take me a while to nick somebody else's internet....) :lol:
banned#26
Shengis
Hey yourself, you've caught me on my last night here for a while. Moving tomorrow so it's going to take a while to sort out my internet (ok take me a while to nick somebody else's internet....) :lol:


Good luck with the move.

We will miss you, come back soon.
banned#27
Shengis
Hey yourself, you've caught me on my last night here for a while. Moving tomorrow so it's going to take a while to sort out my internet (ok take me a while to nick somebody else's internet....) :lol:


see ya! good luck with the move! hope the wireless is strong where you move to!
banned#28
Shengis
Hey yourself, you've caught me on my last night here for a while. Moving tomorrow so it's going to take a while to sort out my internet (ok take me a while to nick somebody else's internet....) :lol:


Where you moving to Shengis?
#29
however much darling gets the end user pays the 17.5%.

i am only talking about end users.

okif you buy 1,000 pounds of goods plus vat you pay 1,1750.175 has gone to the excheqer that never changes he gets 17.5%

simple economics
#30
guv
Where you moving to Shengis?


The **** end of no-where :lol: A little village up on the north downs. No chavs, no hassle. Peace and quiet at last.....
#31
no your right i worked it backward 660+ vat is only £775.
#32
The **** end of no-where A little village up on the north downs. No chavs, no hassle. Peace and quiet at last.....


wormwood scrubs?
#33
damn the greedy government lol
#34
false prophet
wormwood scrubs?


You must have missed the 'no chavs' bit :giggle:

I shall walk around stating 'I'm the only chav in the village' PMSL.
#35
deejays avatar pwns the chavs
#36
best phrase for PMSL in this context wins a pound

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