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Last edited 16 Oct 2020
Turnover in the construction industry
In general terms, turnover is the total amount that a business bills to its clients, less any discounts, VAT, and so on. It includes amounts such as the shipping that is required, and any expenses that are billed to the client.
It is important to remember that turnover is determined when the goods and services are actually provided, rather than when they have been invoiced or when the cash has been received. As income from investments such as interest and dividend income is not derived from the provision of goods and services, these are not included in turnover.
Turnover determines when a business has to register to pay Value Added Tax (VAT). VAT is a tax added to the cost of certain goods and services. It is only accountable where the party raising an invoice is VAT registered. It is necessary to register if VAT-able turnover exceeds a minimum threshold in any 12-month period.
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