Stream of Plugly

Larson: tell me what your vat rate is
Pepé: 17.5%
Pepé: that’s everyone’s VAT rate
Larson: i thought you charged or paid less, or something
Pepé: but that’s not what everyone has to pay the HMRC
Pepé: everyone must charge 17.5%
Pepé: but not everyone must pay it
Pepé: I actuallky pay 11%
Pepé: but I must charge you 17.5%
Pepé: it’s a charge-back scheme, in effect
Pepé: the actual-paid rates vary from 5% to 17.5%
Pepé: but everyone charges 17.5%
Pepé: well
Pepé: not everyone
Pepé: not booksellers, for instance
Pepé: or manufacturers of baby goods
Pepé: or energy suppliers
Pepé: books = 0%
Pepé: baby food = 0%
Pepé: energy = 5%
Pepé: but those are exceptions to the main rule, which is that most people must charge 17.5%
Pepé: but don’t get that confused by what I actually have to pay to the HMRC
Pepé: that’s why printing ex-VAT prices is stupid
Pepé: it means nothing
Pepé: and hasn’t done for years
Pepé: so, as an example, if I do a job for you that amounts to £100, I must charge you 17.5% VAT, so my invoice is £117.50
Pepé: £100 for me
Pepé: £17.50 VAT
Pepé: but
Pepé: I only have to pay £11 VAT to the HMRC
Pepé: so I ‘earn’ £6
Pepé: £6.50
Pepé: though I don’t really ‘earn’ it at all because I can’t claim back VAT on purchases
Larson: k, shush now
Larson: VAT = dull
Pepé: which is how the flat-rate scheme works
Pepé: yes
Pepé: just trying to help
Pepé: it is dull
Pepé: but also oddly fascinating
Pepé: what fascinates me about VAT is what a great waste of time it is in non-manufacturing industries like ours
Pepé: there’s literally no point me charging VAT as I don’t add value
Pepé: but the law says i must
Larson: aaaaaaaaargh!
*** “Larson” signed off at Wed Aug 08 11:36:11 2007