Having already asked the accountant and somewhat confused him (probably due to my bad explanation) I thought I would post on here. I have a credit account with a certain building merchants. Someone has purchased goods through my account. They have paid the merchant direct and the merchant has built a margin in for me. All well and good. I'm just trying to understand the VAT figures right in my head. I thought I should treat the payment to my merchant account by the customer as if it was just another invoice which I had raised direct to the customer myself. Have a look at the below figures see if they make sense to anyone. I'm not sure if the VAT tallies up ok.
All these figures include VAT
Customer orders goods - pays on order - +£2443.46 (account now in credit 2443.46).
Merchant invoices me for goods - -£2146.45 (account now in credit 297.01).
Customer returns some goods - -£160 (merchant uses my credit to process refund, account now in credit 137.01).
Merchant credits me for goods received +£205.34 (over and above refund amount as I disputed the margin they built in, account now 342.35 in credit, I suppose this is the important figure which vat discrepancy will be based on).
Goods damaged on site, my responsibility, replaced via merchants - -£112 (account now £230.35 in credit).
In my spreadsheet I have put 2 sales as below
£2,036.22 + VAT £407.24 = £2443.46
£171.12 + VAT £34.22 = £205.34
Total VAT received
£441.46
I have put 3 purchases as below
£1788.71 + VAT £357.74 = £2146.45
£133.33 + VAT £26.67 = £160
£93.33 + VAT £18.67 = £112
Total VAT reclaiming
£403.08
VAT difference
£38.38
I'm not sure where this VAT difference comes from. I thought it should be perhaps 20% of my 'profit'/margin but doesn't seem to tally up. I've tried excluding the 112 as technically that is a purchase by myself to cover a loss but doesn't help. It hurts my head also because i've never actually seen this money only the profit/margin. The overall figures seem to work with my spreadsheet remaining right to other balances, but just the VAT i'm not sure
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