A question about Box 6 on my VAT return...

[curableromantic]

I have high reclaimed expenses (I have to pay flights and hotel up front then bill them).

So, if in a quarter I bill say 5k, but only 3,500 of that is fees, is the box 6 figure 5k less VAT or 3.5k less VAT?

If anyone can shed any light I'd be very happy, still waiting for brain to be returned after baby...

Box 6 is your total turnover excluding VAT. I would rather not say this is £5k less VAT, because that is not really what it is. You need to stop thinking in gross figures less VAT, you need to think in net figures plus VAT.

So you have incurred some travel expenses, let's say this is £800. There is no VAT on travel so you won't have paid any VAT on this. You have some hotel bills which you should have VAT invoices for - say £400 plus VAT of £70.

Now you are billing for fees of £3,000 plus expenses of £1,200, total £4,200 net plus £735 VAT. Note that you do charge VAT on the recharged travel expenses because you are not supplying travel to the entity you are billing.

So in this period (assuming you don't have any other transactions) you have Total Inputs of £1,200 (box 7) and Total Outputs of £4,200 (box 6). Input Tax (box 4) is £70 and Output Tax (box 1) is £735.

Thanks so much mranchovy, for your explanation. I've been doing it wrong till now!