VAT to be remitted –This is when you deduct your selling VAT from your Buying VAT giving you a true idea of what VAT is owed. Example – 20% VAT
———————————
Buy price (exc. VAT) 8.33 Buy Price (Inc. VAT) 10
Difference 1.67 VAT
———————————
Sell Price (exc. VAT) 16.67
Sell Price (Inc. VAT) 20
Difference 3.33 VAT
——————————-
VAT to be remitted (What you owe the VAT man)
Buy Price 8.33 + 1.67 VAT (claim) Sell Price 16.67 + 3.33 VAT (owe)
= 3.33 – 1.67
= 1.66 owed in VAT
Disable VAT remitted- This is simply when you don’t claim any VAT on your purchases and you just pay the VAT owed.
Example – 20% VAT
———————————
Sell Price (exc. VAT) 16.67
Sell Price (Inc. VAT) 20
Difference 3.33 VAT
———————————
VAT OWED = 3.33 (We’re not claiming anything from the purchase)
