VAT Rise To 20%

[DeludedAussie]

The rates I understand for FRS is 14.5% and VAT is charged at 20%

At the moment it is 13.5% on a 17.5% rate

So am I correct in thinking that the VAT increase will make me 1% better off?

[Clare@InTouch]

The flat rates are going up be varying amounts, and most people will be better off.

A full list of the new rates here:

HM Revenue & Customs: Flat Rate Scheme for VAT

[CheeseSlice]

I had a random thought about this last night.

If I send all of my timesheets for december to my agency before the end of the 17.5% VAT (rate allowing them to immediately invoice the clientco), but then save all of my invoicing until after it goes up to 20%, will that upset my agent?

I'm too nice to actually do this, but was just a thought....

[Nixon Williams]

The rates I understand for FRS is 14.5% and VAT is charged at 20%

At the moment it is 13.5% on a 17.5% rate

So am I correct in thinking that the VAT increase will make me 1% better off?

The current Flat Rate % for an IT contractor is 13%, this will change to 14.5% after the VAT rate increase on 04/01/11.

The current saving is £22.25 per £1000 net invoiced, after the rate change the saving will be £26 per £1000 so the saving will be greater after 04/01/11!

Remember that there is a 1% discount for the first 12 months of registration.

Alan

[malvolio]

I had a random thought about this last night.

If I send all of my timesheets for december to my agency before the end of the 17.5% VAT (rate allowing them to immediately invoice the clientco), but then save all of my invoicing until after it goes up to 20%, will that upset my agent?

I'm too nice to actually do this, but was just a thought....

I think you need to read up on the meaning of the Tax Point as applied to VAT.

And no it won't. I leave you to work out why.

[centurian]

I had a random thought about this last night.

If I send all of my timesheets for december to my agency before the end of the 17.5% VAT (rate allowing them to immediately invoice the clientco), but then save all of my invoicing until after it goes up to 20%, will that upset my agent?

I'm too nice to actually do this, but was just a thought....

Doubt it will make any difference to them - highly unlikely they will be on FRS unless they are a tiny agency.

They will reclaim whatever VAT you charge them - and have to cough up to HMRC whatever VAT they charge ClientCo. The fact that they are different rates doesn't matter - after all, the net amounts will most certainly be different.