Autumn Statement 2016

[gables]

IMO the FRS was intended to simplify accounting without putting businesses in a worse-off position than had they been on the standard scheme, otherwise why bother having different rates for different business sectors?

On that basis, the new measures seem punitive and defeat the whole point of the FRS in the first place as I'm not sure the benefit of simplified accounting outweighs the potential cost of remaining on the scheme, unless you genuinely have very low levels of expenditure.

The bit in bold is correct, when I had my retail business the FRS greatly simplified life, to the point if I was slightly out of pocket it was still worth it due to the lack of hassle, but in the main it was evens stevens. I don't think you're meant to make money on VAT matters, but the attitude to FRS on here seems typical of a lot of contractors who seem to almost see this a human right

Someone has said it already, not being VAT registered makes you 20% cheaper and for organisations that can't claim back VAT that should be a consideration. £81k on a 220 day year is £368/day, I'll wager there are many contractors below this and lets be honest £81k is still really quite healthy.

[jamesbrown]

It's also not designed to hit us. We are merely collateral damage here.

Yes in the sense that HMG is driven by the press as much as logic, and this was responding to the Guardian story on FRS avoidance and abuse of the Employment Allowance. That said, I'd describe this as two birds with one stone for HMT, since we're clearly being targeted in a coordinated way. In other words, collateral is too strong.

[jamesbrown]

IMO the FRS was intended to simplify accounting without putting businesses in a worse-off position than had they been on the standard scheme, otherwise why bother having different rates for different business sectors?

On that basis, the new measures seem punitive and defeat the whole point of the FRS in the first place as I'm not sure the benefit of simplified accounting outweighs the potential cost of remaining on the scheme, unless you genuinely have very low levels of expenditure.

Agreed, I'm just saying that the %s weren't pitched correctly to begin with (e.g. for IT codes). Instead of correcting that, they've reversed direction and made it punitive. This is how an incompetent (or press-driven) gov't operates; like a seesaw.

[sal]

Not if your client can't claim VAT back (gambling, banking etc) , you'll be 20% cheaper for them overnight.

This is only relevant if you are direct with the client, as the agency will most likely still charge them VAT fro your services regardless...

[Sonicboom]

This is only relevant if you are direct with the client, as the agency will most likely still charge them VAT fro your services regardless...

So if I am direct, are you saying it would make sense not to charge VAT now, then negotiate a higher rate, which is turn means more money is my pocket?

[MrC]

They have simply raised the Lower Limit for Employers NI to £157 from £156 which puts it in line with Employees NI thresholds, what they cease to shout about is that they have altered the upper earnings threshold from £827 to £866. In a nutshell, contractors are likely to be paying more of their contract rate at 12% for Employers NI and less at the 2% for the top end. Nicely kept quiet!

Sneaky! Thanks for explaining.
At the risk of showing my ignorance when did Lisa become Lucy?

[gables]

This is only relevant if you are direct with the client, as the agency will most likely still charge them VAT fro your services regardless...

ahh, that's a good point

[eek]

Sneaky! Thanks for explaining.
At the risk of showing my ignorance when did Lisa become Lucy?

In April when Lisa took a break.

[gables]

So if I am direct, are you saying it would make sense not to charge VAT now, then negotiate a higher rate, which is turn means more money is my pocket?

it depends if your client charges output vat against which to offset input vat, if they can't like where I am then for example if your day rate is £100+vat i.e £120 of which you get to keep £100, then if you're not vat registered then your day rate can be £120 and the cost to your client is still £120 and you keep £120

[SueEllen]

Well exactly. That's what I meant by all people doing it. Works for unions.

I know I will be asking a higher rate, my skills are quite specialist so there won't be so much competition.

It works for unions employer by employer.
For example all teachers in non-academy state schools or all nurses in NHS trusts.

Those teachers who work in academies, private and public schools, and those nurses who work in GP surgeries, private clinics, care homes etc get different rates of pay.