I note the post about the margin scheme and have linked it below - but the answer calculation is not correct.
The margin scheme is not Profit + VAT £500 + £100
It should be 20% of the profit - ie £380 + £120 = £500
Is there a solution for this? - Not that you would want to present your profit margin to the client anyway.
I’m not sure what you’re getting at. In the linked post profit is £600. I don’t see where it says actual gross profit is £500.
Where is the £380 from?
You are right - where did the £380 come from.
However the Margin scheme VAT on £500 is £100 (Profit £400 Tax £100)
The Margin scheme VAT on £600 is £120 (Profit £480 Tax £120)
The flat rate 20% added in the first example does not work for the margin scheme.
plus there is no requirement to show vat amount as separate entry on invoice to end user
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