Changes in Flat Rate Tax Scheme 1/4/17

[uk contractor]

Quite simples actually. VAT = 20%.


Do not register for VAT & charge the client way less than 20% extra! Do not be greedy say add on 5-10% only to your daily rate quote.


Just tell the client its because HMRC are not keen on FRS for IT contractors anymore so you are splitting the difference with them!

[northernladuk]

Just tell the client its because HMRC are not keen on FRS for IT contractors anymore so you are splitting the difference with them!

How on earth do you expect a client to stump up the difference to taxation changes for your business? That's just beyond dumb. Would you like it if the agency did the same to you and suggested they take the difference of your day rate?

Argue for a increase at renewal stating increased costs, new rate is this take it or leave it... but getting the client involved in your tax affairs is a pretty poor way to run your affairs.

[TheCyclingProgrammer]

I don't did a quick search and I couldn't see a discussion about this.

Then you didn't search very well. Its been discussed about a dozen times in the last few months. Here's just a few:

http://forums.contractoruk.com/gener...-rate-vat.html
http://forums.contractoruk.com/accou...ndard-vat.html
http://forums.contractoruk.com/accou...te-scheme.html
http://forums.contractoruk.com/accou...reg-query.html

[eek]

Quite simples actually. VAT = 20%.


Do not register for VAT & charge the client way less than 20% extra! Do not be greedy say add on 5-10% only to your daily rate quote.


Just tell the client its because HMRC are not keen on FRS for IT contractors anymore so you are splitting the difference with them!

All you've done there is show that you don't understand how VAT works on business to business transactions

[northernladuk]

All you've done there is show that you don't understand how VAT works on business to business transactions

That isn't really all he's shown but that's the pertinent one

[eek]

That isn't really all he's shown but that's the pertinent one

I added more then remembered that this was a professional forum and deleted it - it boiled down to I'll treat him with the respect his knowledge deserves...

[kaiser78]

Lots of engineers that aren't specifically (/explicitly) civil or structural use the 12% business not listed.

HMRC have had a few cases of getting people to change it and pay back the difference, with mixed results

You don't have to pay back the difference if you change VAT categories. You change and pay in the new category from that point forwards.

[pr1]

You don't have to pay back the difference if you change VAT categories. You change and pay in the new category from that point forwards.

If you can prove (in court) that your choice was reasonable in the first place, then yes - otherwise everyone would just choose the lowest one until investigated

[northernladuk]

I added more then remembered that this was a professional forum and deleted it - it boiled down to I'll treat him with the respect his knowledge deserves...

Chicken...

[5000]

Hi,

My question is, and I know everyone has different circumstances, is how are they tackling this situation. As I am confused about the best option.

thanks in advance.

My initial cynical thoughts at the time were "how can I boost my spend on goods to >£1000?" so that the new rules don't apply. Will be getting proper advice from the accountant before making a decision.