RE: Re: Parcelforce fees

["Graham Howe" <graham@xxxxxxxxxxxxx>]

> =A323.01 is what I have to invoice. =A313.01 goes in tax, and =A310.00
go=
es
> to the retailer....
>=20
> 1: The CD costs =A310 + vat
> 2: I have to pay =A311.75 including VAT to the retailer
> 3: I pay 40% income tax, so I have to earn =A319.58 before tax to be
> left with =A311.75 in my pocket.
> 4: I have to charge my clients VAT, so I have to invoice =A323.01 to a
> client in order to buy a =A310 CD.

Actually it's worse than that if your company is subject to IR35 or if you
=
are paying National Insurance, I always used to bank on at best 50% take
ho=
me from invoice excluding VAT.

Or of course you buy the CD through the company ;-) in which case the sums
=
look a bit like this....

1: Pay the retailer =A311.75
2: Claim the =A31.75 back from HMCE
3: The =A310 is seen as a purchase and therefore is taken 'above the line'
=
in the company accounts therefore reducing the corporation tax by 30% (or
w=
hatever current small company tax is) of its value =3D =A33.00 back
4: 'Extra' =A33 taken out of the company as dividend so 40% of that goes
to=
IR
5: Net result, client charged =A311.75 inc VAT, company gets a CD in its
in=
ventory and I have =A31.80 in my pocket

Of course technically my company owns the CD (hmm, wonder how to
depreciate=
it!) and for my wife to use it might constitute a benefit in kind, but tha=
t's a couple of minor points in this purely hypothetical example that I
cou=
ldn't possibly condone ;-)=20








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