A client asks whether my quote includes VAT; how do I work out the total to put on it?

Why clients ask in the first place

Because 7,500 on its own can mean two things. A client building a budget wants the figure that will actually leave their account, and you want the figure that stays with you. Write only 7,500 plus VAT and the client does the maths their own way, sometimes wrongly, or comes back with another question that delays sign-off.

The fix is simple: leave nothing for the client to calculate. Write out all three numbers.

Working out the three figures

1. Open the VAT calculator and choose Add tax to a net amount.
2. Type your fee before tax, for example 7500.
3. Type the rate that applies to your service once you have checked it with the tax authority; this example uses 15.
4. Copy the result: net 7,500, tax 1,125, gross total 8,625.

With 5 entered as the rate, the tax would be 375 and the total 7,875. That is a 750 difference between the two, which is reason enough to confirm the rate before the quote goes out instead of relying on a figure you heard somewhere.

Putting it on the quote

In the Quotation generator, enter your line items at their pre-tax prices and type the rate in the tax field; the template then shows the subtotal, tax and total. Use the calculator to confirm the figures match what you worked out, especially when the quote includes a discount.

• State clearly that line prices are before tax.
• Put the tax amount on its own line, with the rate used.
• Make the total the most prominent number, because it is what the client pays.

What if you are not registered for VAT?

If you are not required to charge VAT, do not add it, and say so on the quote so the client does not assume the price is missing something. Whether you must register depends on your turnover and the rules where you work; the answer comes from the tax authority or your accountant, not from a calculator.

When an accepted quote becomes an invoice in the Basic invoice generator, carry the same figures across unchanged, so the client never finds a gap between what they approved and what they are billed.