UK Invoicing

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Hi all, I'm new to the forum, I'm a uk based small business in the construction industry and would like some advice about invoicing. I would like to know what to do when a client asks me to breakdown the cost of a job into labour and materials, I do not want to pass my discount from a wholesaler onto my clients and I usually add 20%, how do I invoice for this? So confusing! Any advice would be greatly appreciated!
 

Fidget

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All you're doing is saying on the invoice that of the total cost of the job you're invoicing them for, £x is for labour and £x is for materials.

The client is not asking you how you got to these costs in terms of trade discounts/mark-ups, but purely how much of the total you're charging them is for labour and how much is for materials.
 
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Hi Fidget, thanks for your reply but I'm still a bit confused, do I need to do a different invoice for the client and myself? For example one for them showing labour cost and materials cost with the markup included and then my one with amount of markup included? Am I not supposed to pay tax on the amount I've added to the materials? Thanks in advance
 
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Hi Fidget, I think I've grasped the concept now, it doesn't matter what markup I'm putting as long as all my materials invoices from my wholesaler are deducted from my turnover at the end of the tax year
(forgive me if I'm using incorrect terms) I'll be paying the correct amount of tax anyway, is that correct?
 
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Your mark-up is the Gross Receipts not your COGS (Cost of Goods) your break down is what you are charging your Client not your COGS. So provide a detailed invoice of what you are charging to your Client. At the end of the year this is called your Gross Receipts.

With regards to the Tax Question, at the end of the year when you submit your 1040 Schedule C or if you are in a partnership Schedule K-1 you will attach a Profit & Loss Statement to your filings for example, time period of January 2014 through December 2014 would be your Profit and Loss Statement for the whole year. The Gross Receipts are your Sales (Clients) and you would reflect your COGS to represent your Income (Mark-Ups.). I hope this has helped you.
 

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