how to calculate vat for car trader,
hi,
can anyone let me know that how to calculate vat on car sales business,?
some body told me which is below , is it right?
purchase price £1000/
expences, £500/
sale price, £2000/
what figure should use to pay vat? is it 1000+500=1500 , then profit added 500, SO WHAT IS VAT ABLE VALUE, is it 500 value to pay on vat or 2000 total amount?
2nd thing ... if i use excel then how can i pay vat on 500 pounds profit?
i tried
=a1*20% which shows vat value 100 on 500
but my accountant says that formula for vat should be
=round(a1/6,2) which shows vat value 83.33 on 500
so which is correct, please reply soon,
thanks
I'd bin your accountant mate
I'd bin your accountant mate - he sounds like a dummy LOL...
20% of 500 is always 100 so the sale price + VAT would be £600 with £100 going to the good ole tax man.
Also your better to use the MRound which rounds to the nearest penny. so the VAT to add function would look something like :-
=MROUND(PreVatSalePrice*VATRate,0.01)
Total sale would be the result of this plus the pre VAT sale price