New to this, forgive me for the questions..

[richy]

If you find one that only takes 5%, then you should name and praise them!! 5% seems incedibly low, given the factoring they have to take into account, plus if you've opted in they have to pay you regardless of whether they see the money from the client.

heard of a few, i never been lucky enough to deal with these agencies yet myself mind you, Penta Consulting is the one I can remember off the top of my head. average seems to be upto 15%..... what commission rates are typical? thx. richy

[TheFaQQer]

heard of a few, i never been lucky enough to deal with these agencies yet myself mind you, Penta Consulting is the one I can remember off the top of my head. average seems to be upto 15%..... what commission rates are typical? thx. richy

Minimum 12.5% from what I've heard. Some will try to take 30% or more though.

[achillea]

Flat Rate Scheme

You can join the flat rate scheme as long as your company turnover is less than £150k per annum (excl VAT). The percentage you give back to HMRC depends on your business classification - this percentage can differ by sector. We are registered as 'Management Consulting' which attracts a 12.5%. However you get 1% off for your first year which is worth having.

FYI the flat rate calculation is (example):

Revenue for month £10,000 excl VAT
VAT charged to client (17.5%) £1,750
If registered at 13% flat rate, VAT due £1,300
VAT retained by business £450*

* This is supposed to cover all of your 'input VAT'. In your accounts this is shown as a VAT Adjustment ie additional revenue, added to your net revenue subject to tax.

[achillea]

Flat rate scheme

Sorry, I've had 2 glasses of wine and just spotted an error in my example. The correct calculation is:

Revenue for month £10,000 excl VAT
VAT charged to client (17.5%) £1,750
If registered at 13% flat rate, VAT due £1,527.50 (13% of £11,750) **
VAT retained by business £222.50

** The 13% is calculated on the net revenue to client + 17.5% vat

[Gonzo]

Sorry, I've had 2 glasses of wine and just spotted an error in my example. The correct calculation is:

Revenue for month £10,000 excl VAT
VAT charged to client (17.5%) £1,750
If registered at 13% flat rate, VAT due £1,527.50 (13% of £11,750) **
VAT retained by business £222.50

** The 13% is calculated on the net revenue to client + 17.5% vat

Don't forget you then have to pay 20% Corporation Tax on the £222.50, so leaving you £178.

Not so great but it still beats having to tot up all expenditure and netting it off.

[achillea]

The corporation tax is only paid on revenue less expenses so you in reality wouldn't be paying CT on the whole amount... the extra VAT is treated as additional revenue.

[Bluebird]

The corporation tax is only paid on revenue less expenses so you in reality wouldn't be paying CT on the whole amount... the extra VAT is treated as additional revenue.

yes, but if you would make 10k profut without the FRS, and then with the FLS you make 10.5k, you get CT'd on the extra £500 which is the VAT, in effect you get CT's on the whole amount, unless you have huge expenses or don't make a profit.

[oraclesmith]

Just spend it on a new laptop.

[Bluebird]

Just spend it on a new laptop.

what one every month ?

[M@H]

Minimum 12.5% from what I've heard. Some will try to take 30% or more though.

My last agency was getting 6% (Spring) Current one is getting 10%.

Cheers
Matt