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What to think about in dealing with the change in vat rate from 21% to 23% |
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Written by Nilsson Denver
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Sunday, 04 December 2011 20:38 |
How to deal with a change in the 21% VAT rate
It had been pre-announced that in the Budget for 2012 to be announced on the 5th and 6th December 2011, that the 21% VAT rate will be increased to 23%. Businesses need to prepare now for these changes.
A change in VAT rates happened in on 1st December 2008 when the 21% rate changed to 21.5% and then on 1st January 2010 it was reduced back down again to 21%. And in 2011 some 13.5% VAT rate items were change to 9%, so many businesses have experienced a change in VAT rates.
What are your options
All vat inclusive prices prices go up 2% but there is no increase in your sales margin or
Keep prices as they are and absorb the vat increase, which reduces your sales margin by 1.626%. So for every €100 you lose €1.62 cent of your profit margin
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Last Updated on Sunday, 04 December 2011 21:10 |
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Calculating and Paying Rebates to Customers |
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Written by Nilsson Denver
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Thursday, 28 April 2011 20:40 |
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Calculating and Paying Rebates to Customers
What is a rebate?
Rebates are additional discounts given to customers. A common form of rebate is when a customer will get a rebate of say 10% on the of their purchases net of VAT in a 12 month period. This rebate will be given to them after the 12 months have finished. The rebate can be given as a payment to the customer, or as a credit note to the customer for the rebate amount plus VAT, or both a payment and a credit note.
The best way is to issue a credit note for the 10% plus VAT and then give the customer a cheque for the gross amount of the credit note (net plus vat). This also has the effect of reducing the yearly sales from this customer by 10%
Why do companies give rebates
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Medical Insurance Tax Relief, Age Related Tax Relief and Benefit in Kind (BIK) |
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Written by Nilsson Denver
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Monday, 14 March 2011 20:22 |
Medical Insurance Tax Relief, Age Related Tax Relief and Benefit in Kind (BIK)Despite the impression that in the Republic of Ireland that there is a community rated health insurance scheme i.e. we all pay the same amount for the same policy if it is from the same health insurance company no matter what our age is, well we don’t. We do not all pay the same amounts for the same policy.As we get older we are charged more for our health care insurance. While it looks like we all pay the same amount, the government have in fact worked out a scheme. The scheme is as you get older and are charged a higher amount for being older, the government subsidises your health insurance policy by paying an aged related tax credit directly to the health insurance companies on your behalf.You can only claim tax relief on the policy cost less this age related tax credit. You do not have to make a claim for the tax credit if you are a member of an approved medical insurance provider e.g. VHI Healthcare, Quinn Healthcare or Aviva Health. If your health insurance tax credit or your aged related tax credit or both are not deducted by the health insurance companies automatically, you can make a claim for these credits at the end of the tax year by completing a tax form. Summary of true cost of health insurance and tax credits available
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Last Updated on Monday, 14 March 2011 20:26 |
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What is a Trial Balance |
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Written by Nilsson Denver
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Saturday, 12 March 2011 21:40 |
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What is a Trial Balance.
A Trial Balance is a list of all the individual nominal ledger accounts, showing the name of the nominal ledger and the balance of that nominal ledger as at the date of the Trial Balance. The balance in the nominal ledger will be recorded in the Debit or Credit column of the Trial Balance.
The total of all the values in the debit column must equal the total of all the values in the credit column. What you are doing is performing a trial. You are checking to see if the value of all the debits balances equals the total of all the value of the credits balances. This is how this report got its name. It is a trial list of all the balances in the nominal ledger.
If the total of all the debit balances does not equal the total of all the credit balances, then there is an error in the nominal ledger which must be found or the balance or value in the nominal ledger account has been written down incorrectly in the Trial Balance. If you are using bookkeeping software, by the way spreadsheets are not bookkeeping software, your trial balance should always balance as the software is handling all the double entry transactions. If your bookkeeping software Trial Balance does not balance, then you have a serious problem and should immediately contact the software support department and get it fixed.
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Last Updated on Saturday, 12 March 2011 21:42 |
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Nominal Ledger, what does it do |
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Written by Nilsson Denver
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Saturday, 12 March 2011 21:32 |
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NOMINAL LEDGER
A nominal ledger also known as a general ledger, just exactly what is it?
Lets say we want to know what our total sales are for the first 7 months of the year we have a few options to get this figure. Here are some of the options;
1. Add up all our sales invoices and add up all our sales credit notes and subtract the credit notes from the invoices and come up with the sales value
2. List our sales invoices and sales credit notes in a Sales Daybook. Take the totals from the sales daybook for each of the seven months and add them together and get the total sales value
3. Taking the monthly total values from the sales daybook, listing each monthly total in sequence e.g. January followed by February followed by March and so on up to July (month 7)
Then writing beside each value write down the month that value refers to. Write down whether it is a sales invoice value or a credit note value and indicate which page in the sales daybook you got these total values from.
With this third option you have just created a nominal ledger.
A nominal ledger is a place where you can trace back, for example, as to how your sales figure was calculated for each month or for a number of months.
We only have to write the values down once and so each new month can be written beneath those values from the previous month. This list is actually a ledger. We now have traceability. We can see where the values came from, the auditors or any other person who wants to confirm how we calculated our sales figure in our profit and loss statement can see where the values came from.
There is a common layout structure to a nominal ledger. It is set up in a standard T account format and uses the Debit and Credit rules, Debit transactions on the left hand side of the T account and Credit’s on the right hand side of the T accounts.
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Last Updated on Sunday, 30 October 2011 21:49 |
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