Contractor "Fees Payable" vs "Rate" and convention on VAT

[monoceros]

Hi,
I am currently negotiating my second contract (whoo hoo!). But I need to be 100% about the wording on the amount that I am being paid.

My (still very newbie) question is: when asked to quote a daily rate do you always state the rate before VAT is added (so quote £100 and invoice £120); is there a general convention that the amount stated is always before VAT?

Background:
My first contract quoted a rate of £X per day and this was understood and accepted to be before VAT the the actual amount I invoiced per day was £x+20% .
The new contract has a "Fees Payable" of £X per day; of course I will clarify this in writing with them (that they are expecting to see invoices for £x+20%).

Thanks,
Mono.

[kaiser78]

Hi,
I am currently negotiating my second contract (whoo hoo!). But I need to be 100% about the wording on the amount that I am being paid.

My (still very newbie) question is: when asked to quote a daily rate do you always state the rate before VAT is added (so quote £100 and invoice £120); is there a general convention that the amount stated is always before VAT?

Background:
My first contract quoted a rate of £X per day and this was understood and accepted to be before VAT the the actual amount I invoiced per day was £x+20% .
The new contract has a "Fees Payable" of £X per day; of course I will clarify this in writing with them (that they are expecting to see invoices for £x+20%).

Thanks,
Mono.

You have answered your own question - always ensure contract and invoice clearly states 'daily rate + VAT'

[tractor]

...

You have answered your own question - always ensure contract and invoice clearly states 'daily rate + VAT'

Agreed but you should add the term 'at the prevailing rate where applicable' because not everyone is registered.

Also, with a serious question, you should post in a more appropriate forum e.g. Accounting/Legal because...

This forum is populated by savages; plus people with the appropriate experience will be looking in those fora rather than here for serious questions.

[monoceros]

Ok so let me clarify my question

... when looking at contract rates I have always understood them to be net (i.e. an advert for a rate of £250 is actually invoiced at £300) and so by convention when on a interview if asked what my rate is the convention is to state it net.

Am I mistaken on this? Should I quote Gross or "net + vat"?

[TheFaQQer]

I remember being pleasantly surprised when my first invoice was paid, because I assumed that the rate was inclusive of VAT and it was an exclusive rate, so I got an extra 17.5%.

I suspect that their "all fees paid" line implies that they are quoting VAT inclusive rates - just make sure you know which it is before you start the contract.

[TheFaQQer]

... when looking at contract rates I have always understood them to be net (i.e. an advert for a rate of £250 is actually invoiced at £300) and so by convention when on a interview if asked what my rate is the convention is to state it net.

Am I mistaken on this? Should I quote Gross or "net + vat"?

I always quote net prices.

[tractor]

...

... when looking at contract rates I have always understood them to be net (i.e. an advert for a rate of £250 is actually invoiced at £300) and so by convention when on a interview if asked what my rate is the convention is to state it net.

Am I mistaken on this? Should I quote Gross or "net + vat"?

That is the convention. But given that there has been some posters here recently complaining that agents have tried to pull a fast one and claim that the day rate in the contract was 'in the agent's understanding' inclusive of VAT it is good business sense and undoubtedly pays to be as precise in your language as possible.

In short, understanding is not legally binding. A properly specified rate clause is.

[monoceros]

Opened a thread on the same subject in Accounting/Legal - if someone can tell me how to close this thread (cannot find an obvious way...)
Cheers,
Mono

[tractor]

...

Opened a thread on the same subject in Accounting/Legal - if someone can tell me how to close this thread (cannot find an obvious way...)
Cheers,
Mono

Just let it die. If you had left it here, a kind mod would have moved it anyways, they usually do

[TestMangler]

Just let it die. If you had left it here, a kind mod would have moved it anyways, they usually do

Or people might keep bumping it to the top to remind you what a dumb<censored>you are