Did anyone else see Dragon's Den yesterday?

Interesting VAT question from Deborah Meaden

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On Dragon's Den yesterday, Deborah Meaden asked a participant whether their turnover included or excluded VAT.

(ie was his projection 600 or 720k).

Now, as we know, turnover should not include VAT, so it was an interesting point, but confused the person and he didn't get any bids.

Was it a fair question?

Replies (8)

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Psycho
By Wilson Philips
23rd Dec 2019 14:40

I think it was a very fair question. Turnover per accounts may very well exclude VAT but in more general terms one needs to know whether sales income is inclusive or exclusive. His projections may have been based on the selling price.

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By JCresswellTax
23rd Dec 2019 14:21

Agree 100%

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By paul.benny
23rd Dec 2019 16:51

Especially a consumer-facing business. In my experience, retail managers focus on cash in the till and leave us accountants to worry about the VAT.

The actual pitches are much longer than the 5 mins or so we see on TV. My guess is this was shown because it best showed the entrepreneur not to be in command of his numbers.

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the sea otter
By memyself-eye
23rd Dec 2019 14:21

Yes - 20% is a material number (and it showed he didn't appreciate the difference)

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Replying to memyself-eye:
paddle steamer
By DJKL
23rd Dec 2019 15:23

As is 16.66666666......%

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By Tax Dragon
23rd Dec 2019 16:00

And, as you picked that up, so too must 3.33333...% be.

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By 356B
24th Dec 2019 16:07

Agreed, but don't forget he only pays VAT on the margin, so it may only be half the £120k.

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By [email protected]
05th Jan 2020 11:52

Anyone going on Dragons Den without having consulted an accountant beforehand on their business plan projections is just begging for rejection.

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