VAT FRS new rate

[northernladuk]

This might be a useless question, but does 'labour-only' imply anything about the type of work as opposed to some kind of specialism? If you are a building site labourer, you're shifting bricks and whatever, but with no specific expertise. Any difference to 'thinky' work?

Well at least you got one thing right in that question. Want to guess which bit

If you are in 'thinky' work maybe you could apply a bit of that?

[SlipTheJab]

TBH Coming out neutral WRT VAT isn't as issue as it was always free money not earned in the past, I'm more concerned with the whole attack on contracting starting with the public sector in April, if that makes its way to the private sector its all over really isn't it

[TheCyclingProgrammer]

If I stayed in VAT registered hotels then yes it would have exceeded 2% in total. But I'm a cheapskate and stay in smaller places.
VAT expenditure probably around the 2% mark, but not 100% sure as I've never calculated it before.

Hotel stays aren't a purchase of goods so nope.

[TheCyclingProgrammer]

TBH Coming out neutral WRT VAT isn't as issue as it was always free money not earned in the past, I'm more concerned with the whole attack on contracting starting with the public sector in April, if that makes its way to the private sector its all over really isn't it

The only way to remain VAT neutral is to move on to the standard scheme. If you're caught by the new rules, which leave you with only £200 surplus on £100k net turnover (IIRC) then you're almost certainly going to make a VAT loss (unless you're total VATable expenses are less than £1k net - your accounting costs are probably around that alone).

[northernladuk]

Hotel stays aren't a purchase of goods so nope.

[TheCyclingProgrammer]

I'm not sure why people are struggling so much with these new rules - as ridiculous as I think they are, they are at least fairly simple to get your head around.

https://www.gov.uk/government/public...technical-note

TLDR: must be goods, must be greater than 2% of annual gross turnover and greater than £1k, bought exclusively for business purposes, cannot be capital expenditure (as defined by VAT rules, not how you treat the purchase for accounting purposes), cannot be any travel or subsistence, cannot be vehicles (except for transport businesses).

Common things we incur as costs that are services, not goods (or otherwise excluded by the above rules): travel, subsistence, accommodation, accountants and other legal fees, insurance, hardware purchases that would be considered capital under VAT rules (anything that is expected to have value over a period of time, such as phones, computers, tablets, office furniture etc.), web hosting, domain names, computer software (digital downloads), web services.

In other words, pretty much everything.

[northernladuk]

I'm not sure why people are struggling so much with these new rules - as ridiculous as I think they are, they are at least fairly simple to get your head around.
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Indeed. But if people don't know the difference between an expense and goods to begin with the rest of the post is just a waste of internet space lol.

[Lance]

I thought I understood the new rules. Until I spoke to my accountant. Who then told me a load of tulip.
Having read that link it is clear that the accountant appears to have forgotten everything about my business (despite the fact he's doing the year end right now).

So you're right. The rules are clear and I'll be looking for a new accountant once he's finished the accounts (and I've checked them with a fine tooth comb).

To be fair to him he's just taken over my books as the firm seem to be having some staff churn right now, but that doesn't excuse what I was told being basically wrong.

[pr1]

So can we agree that "ask your accountant" is not always the best way to find the right answer

[northernladuk]

So can we agree that "ask your accountant" is not always the best way to find the right answer

Not really. One bit of dodgy advice is hardly a game changer. If he hadn't asked he wouldn't have found a problem he now intends to fix as well.

Does show that when you do ask them you still need to do your research and understand what they are telling you though.

Shame you are back to your pointless trolling posts though. One of them earlier today was nearly helpful.