Hi all,
Posting here on behalf of my wife who is working in her very first freelance role for a large, well known UK company, through a reputable umbrella company. She has a problem, which is probably her fault but needs advice:
She agreed a day rate with the client verbally and then by email (there was no mention of VAT) for which she expected to be paid (minus PAYE and NI, and the umbrella margin of course). The umbrella has charged VAT on top of the day rate and the client has rejected the first invoice, saying that they expected VAT to be included in the day rate. Unfortunately, it seems that the client sent a copy of the contract to my wife to agree but she didn't pick up the fact that the quoted day rate included VAT - naively, my wife thought that would make no difference since she didn't pay VAT (and she didn't ask me...
). Annoyingly, when submitting the invoice she did query with the umbrella as to whether the VAT would be an issue but they said it would be added on top, not taken out of the day rate amount.
So, while this is probably ultimately my wife's fault for not clarifying whether the day rate was inc or ex VAT, we are wondering what the best course of action is. She is gutted to be bringing home 20% less than expected.
I thought contractor rates were usually agreed ex-VAT. In my corporate experience of budgeting/finance we never deal in inc. VAT figures - we talk net amounts and assume VAT will be added. So this is all strange and a misunderstanding in my mind. I'm annoyed that the umbrella didn't pick up on this - I'd have thought they should have.
My wife's contract is ending soon but the client wants to bring her back next year. So we don't want to jeopardise that, but I'd have thought that they'd want to do the right thing by her. It's a mess, all advice welcomed. Thank you.
Posting here on behalf of my wife who is working in her very first freelance role for a large, well known UK company, through a reputable umbrella company. She has a problem, which is probably her fault but needs advice:
She agreed a day rate with the client verbally and then by email (there was no mention of VAT) for which she expected to be paid (minus PAYE and NI, and the umbrella margin of course). The umbrella has charged VAT on top of the day rate and the client has rejected the first invoice, saying that they expected VAT to be included in the day rate. Unfortunately, it seems that the client sent a copy of the contract to my wife to agree but she didn't pick up the fact that the quoted day rate included VAT - naively, my wife thought that would make no difference since she didn't pay VAT (and she didn't ask me...
). Annoyingly, when submitting the invoice she did query with the umbrella as to whether the VAT would be an issue but they said it would be added on top, not taken out of the day rate amount. So, while this is probably ultimately my wife's fault for not clarifying whether the day rate was inc or ex VAT, we are wondering what the best course of action is. She is gutted to be bringing home 20% less than expected.
I thought contractor rates were usually agreed ex-VAT. In my corporate experience of budgeting/finance we never deal in inc. VAT figures - we talk net amounts and assume VAT will be added. So this is all strange and a misunderstanding in my mind. I'm annoyed that the umbrella didn't pick up on this - I'd have thought they should have.
My wife's contract is ending soon but the client wants to bring her back next year. So we don't want to jeopardise that, but I'd have thought that they'd want to do the right thing by her. It's a mess, all advice welcomed. Thank you.
You said:
Comment