Should I accept payment in EUR or GBP

[NoviceContractor]

one more help needed:

The agency has now agreed on a fixed GBP rate and the payment will also come in GBP.
Agency is saying that I can charge them VAT and they have to claim the VAT from HMRC on a quarterly basis, they are insisting if I can charge them VAT on a quarterly basis or delay the payment of the VAT until the end of the quarter as agency can claim the VAT from HMRC only after a quarter. They are ready to pay my time worked on a monthly basis but wants to delay VAT payment.

1. Is this legal?
2. Do I have anything to loose if I agree to this arrangement? What is at stack for me?
3. If I need to deny this arrangement to the agency, what is the best way to put it politely?
4. If Agency goes bust without paying me VAT or if I get into dispute with Agency and they deny to pay me VAT, am I liable for the VAT payments to HMRC?

Thanks

[b0redom]

3. If I need to deny this arrangement to the agency, what is the best way to put it politely?

How about, "I'm terribly sorry, but I think that's illegal."

[SueEllen]

one more help needed:

The agency has now agreed on a fixed GBP rate and the payment will also come in GBP.
Agency is saying that I can charge them VAT and they have to claim the VAT from HMRC on a quarterly basis, they are insisting if I can charge them VAT on a quarterly basis or delay the payment of the VAT until the end of the quarter as agency can claim the VAT from HMRC only after a quarter. They are ready to pay my time worked on a monthly basis but wants to delay VAT payment.

1. Is this legal?
2. Do I have anything to loose if I agree to this arrangement? What is at stack for me?
3. If I need to deny this arrangement to the agency, what is the best way to put it politely?
4. If Agency goes bust without paying me VAT or if I get into dispute with Agency and they deny to pay me VAT, am I liable for the VAT payments to HMRC?

Thanks

The agency can get a factoring loan to pay you.

Just put your VAT on your invoices as normal and ignore them. Their VAT issues are no concern of yours and no it's not legal to p*ss around with VAT like that.

Yes you are liable for the VAT payments if the agency doesn't pay and you do it in the way they say, which is why you just issue normal invoices.

Personally I would worry about the agents solvency.

[stek]

one more help needed:

The agency has now agreed on a fixed GBP rate and the payment will also come in GBP.
Agency is saying that I can charge them VAT and they have to claim the VAT from HMRC on a quarterly basis, they are insisting if I can charge them VAT on a quarterly basis or delay the payment of the VAT until the end of the quarter as agency can claim the VAT from HMRC only after a quarter. They are ready to pay my time worked on a monthly basis but wants to delay VAT payment.

1. Is this legal?
2. Do I have anything to loose if I agree to this arrangement? What is at stack for me?
3. If I need to deny this arrangement to the agency, what is the best way to put it politely?
4. If Agency goes bust without paying me VAT or if I get into dispute with Agency and they deny to pay me VAT, am I liable for the VAT payments to HMRC?

Thanks

I'd definately bin this one - have you done your due dillegence on the agency? Care to name them?

[NoviceContractor]

I'd definately bin this one - have you done your due dillegence on the agency? Care to name them?

The agency is very new - one man agency - may be 8 months old. I have been talking to this guy for last 4 months and he has managed to get me a contract now. I do not want to name them but want to be careful as its my cash that will be at stack for their convenience. I will ask agency to make regular payments.

Thanks everyone.

[stek]

The agency is very new - one man agency - may be 8 months old. I have been talking to this guy for last 4 months and he has managed to get me a contract now. I do not want to name them but want to be careful as its my cash that will be at stack for their convenience. I will ask agency to make regular payments.

Thanks everyone.

Run Forrest, run.

Could be a scam, will leave you very very exposed, already asking you to do dodgy things, doesn't seem to realise how much the Euro/Sterling will affect him as it's not gonna affect you now.

[NoviceContractor]

Run Forrest, run.

Could be a scam, will leave you very very exposed, already asking you to do dodgy things, doesn't seem to realise how much the Euro/Sterling will affect him as it's not gonna affect you now.

I guess he has margin in the tune of 20% to cover the currency changes.

[stek]

I guess he has margin in the tune of 20% to cover the currency changes.

You don't know that, could be 5%.

What if the agent isn't paid by the end client or is paid late? Has the agent the cash in hand to pay you?

If it looks fishy, smells fishy. It's fishy.......

[Boo]

The Agency (based in UK) is insisting that I accept the payments in EUR...

You will probably find that if the client is paying the agent in EUR then they will have no choice but to pay you in EUR too. This because otherwise they will be taking on the currency movement risk for the whole contract rate whilst only receiving their margin.

For the sake of argument say the agency is on 10% margin : in that case a 10% adverse change in the exchange rate would see their entire margin wiped out and they could not afford to accept this risk.

So you are most likely stuck with EUR and it is up to you to negotiate a rate that makes the currency risk worth while.

Boo

[psychocandy]

The agency is very new - one man agency - may be 8 months old. I have been talking to this guy for last 4 months and he has managed to get me a contract now. I do not want to name them but want to be careful as its my cash that will be at stack for their convenience. I will ask agency to make regular payments.

Thanks everyone.

Dicking around with VAT and doing favours will end badly. I know a mate (not in agency business) who did this and ended up being enrolled in someone elses VAT problems....