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VAT shown on invoice as 8.2% - how come?

  • 491 posts
  • # 112022

After 12 years of bookkeeping I've never come across this before:

One of my clients ordered some hampers for his clients for their Christmas gifts. There was nothing out of the ordinary - a few chocs and festive piccies - no alcohol. When I requested a VAT invoice from the business that supplied the hampers, it listed the VAT as being 8.2%

There was only hampers on the invoice - nothing else - and the VAT line actually had the wording ' VAT charged at 8.2%'

Has anyone any idea what this might be? I thought about phoning the business and asking them - but thought I'd run it by the forum first.

Does anyone deal with partial exemption businesses? Do they have to show the VAT like this?

Carol

  • Fellow
  • Practice Licence
  • 30 posts
  • # 112032

Hey Carol!

 

I have never heard of this in my 12 years either, are they definately based in the UK? A couple of countries have an 8% VAT rate.

 

Kim x

  • Associate PM.Dip
  • Practice Licence
  • 12 posts
  • # 112037

Hi

 

I would be intrigued to know the outcome, I have never heard of 8.2% and I've been in accounts and book keeping for many years too.

 

Please do let us know the answer.

 

Ali Mayes

  • Associate PM.Dip
  • Practice Licence
  • 107 posts
  • # 112101

Is the VAT on the whole invoice?  I have seen a similar rate on an invoice that contained an item that was part VAT such as a toy with a book attached? It was only for that item and not the whole invoice though.  Could it be that the food in the hamper is Zero rated but the container or some other products (e.g.alcohol) are vatable?

Regards

Linx

  • 491 posts
  • # 112121

I've now spoken to the company that issued this invoice and the answer is that because its a hamper, there are mixed items for VAT purposes. Some are VATable and some aren't, so their invoicing system works out the VAT for each hamper-as-a-whole product accordingly.

I wonder whether its legal to display it as 8.2% - or should they be showing it as a split of how much is VAT charged at 20% and how much is 0% - and maybe even how much is 5%.

I guess it would be difficult for these type of mixed VAT products to list it this way, especially if multiple hampers are ordered, so I guess this must be how its done.

Is there anyone out there that does bookkeeping for a hamper company that may be able to enlighten us?

Carol

  • 115 posts
  • # 112134

Hi there

One of my clients buys firewood from a supplier, which is liable for 5% vat, but the delivery to his premises

is liable for 20% vat.

On the purchase invoice these 2 entries are listed seperately, ie

                                              Net          VAT           Rate

                       Firewood           £100         £5                5%

                       Delivery             £30          £6                20%

                       Total                 £130        £11

                       Gross                £141

 

I wouldn`t think it would be legal to state 8.2% VAT on an invoice as that rate doesn`t exist in uk.

Our VAT rates are 20%, 5%, zero rated and exempt.

Steve

  • 491 posts
  • # 112182

Hi All

It appears that the method is acceptable - I think it's based on the VAT Notice 727/4 retail scheme : how to work the apportionment scheme

https://www.gov.uk/government/publications/vat-notice-7274-retail-schemes-how-to-work-the-apportionment-scheme 

Steve, I don't think it would be used with a client such as yours - but with a client selling hampers that could have biscuits, cake, cheese, squashes and/or alcohol - all of which are potentially different VAT rates, I can see it's the only way that a business could operate!

Thanks for all your feedbacks.......

Kim - I hope you're well - we must have a catch up sometime :-)

Carol

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