VAT, tax, net profit - which way round!

[beautician12345]

Could someone that is a salon owner and VAT registered check my logic here...?

Say my turnover is £80,000

Vat off that is £16,000

Leaving a total of £64,000

Less outgoings of £30,000

leaving £34,000

Less tax (is it 20%?) = £27,200

So my net profit / money in my pocket is £27,200

Could someone confirm that I've done that in the right order and that I am correct in thinking that the tax is about right?

Many thanks!

 

[beautician12345]

figures are fictional!!

 

[ssuk]

I can put you in touch with a chartered accountant that will advise you. Charges £6 hour and very good?

Sent from my GT-S5830i using SalonGeek

 

[beautician12345]

I have an accountant for end of year but am thinking of expanding and would like to know if it's worthwhile with vat etc. Can't contact my accountant until Monday...

 

[Geminikelli]

Are u self emp or limited if self emp you have an allowance roughly around 7k depending n tax code so you do not get taxed on that Part of profit

so just say profit was 29k you would get taxed on 22k (using rough figures as an example)

 

[Beansy]

Could someone that is a salon owner and VAT registered check my logic here...?

Say my turnover is £80,000

Vat off that is £16,000

Leaving a total of £64,000

Less outgoings of £30,000

leaving £34,000

Less tax (is it 20%?) = £27,200

So my net profit / money in my pocket is £27,200

Could someone confirm that I've done that in the right order and that I am correct in thinking that the tax is about right?

Many thanks!

I understand what you've done (and why you've done it) but you would not subtract a flat rate of 20% for your VAT (from your income). This is because you can offset your output tax against your input tax.

So, if your income is £80k you subtract your expenditure (including your VAT) which gives you your profit.

You would then subtract your tax and NI (rates depend on whether you are a sole trader/limited and your profit). HMRC normally recommend putting aside 30% for your tax/NI.

Hth

 

[beautician12345]

Bloody hell it's hard to make a living