Potential Silly VAT query

[cmscotland]

I'm looking into the differences between going umbrella or Ltd Company having got my first contract and I've been reading over some of the information on VAT but I was wondering obviously if I go Ltd and when I'm VAT registered I need to charge the Agency/Client VAT, now does this go on top of the agreed day rate? or do I need to factor this in?

I just wondered as I've agreed a day rate and if I then invoice with VAT added are the client not going to kick off??

I'm sure there's a simple answer to this and I'm sorry if it is!

[d000hg]

You charge it on top (but ONLY if you are registered), they claim it back, everyone's happy.

[mudskipper]

You charge it on top (but ONLY if you are registered), they claim it back, everyone's happy.

WHS - assuming your client / agency / whoever you invoice is vat registered, they simply claim back the VAT you charge them. But if you fix PCs for old ladies, then you being VAT registered means you will have to charge them an extra 20%.

[Andrew at Boox]

VAT registered can lead to more benefits too

A good benefit of being VAT registered with a Limited Company is you can also take advantage of HMRC's Flat Rate VAT Scheme. This is only available to small companies whose turnover in a 12 month period is less than £150k.

In a nutshell, you charge VAT @ 20% but pay over a reduced percentage to HMRC (depending on your industry) and the difference goes into your company... and eventually your personal income. In fact, it could even cover your Accountant's fees.

See more at HMRC Flat Rate VAT

We've found this to be very popular and it makes your VAT returns much easier too!

[BolshieBastard]

I'm looking into the differences between going umbrella or Ltd Company having got my first contract and I've been reading over some of the information on VAT but I was wondering obviously if I go Ltd and when I'm VAT registered I need to charge the Agency/Client VAT, now does this go on top of the agreed day rate? or do I need to factor this in?

I just wondered as I've agreed a day rate and if I then invoice with VAT added are the client not going to kick off??

I'm sure there's a simple answer to this and I'm sorry if it is!

Whenever you quote your rate always make sure you quote it 'excluding VAT' if you are registered.

If you started a contract not VAT registered, you need to supply the agency with your registration certificate and invoice your rate plus the VAT.

You are probably better registering for the Flat Rate Scheme if you do register as this is less admin and gives you a little bit of cash from HMRC. However, any registration for VAT will give HMRC an opening to any investigation ie VAT, IR35, S660 so be warned!

[tarbera]

Non issue

I'm looking into the differences between going umbrella or Ltd Company having got my first contract and I've been reading over some of the information on VAT but I was wondering obviously if I go Ltd and when I'm VAT registered I need to charge the Agency/Client VAT, now does this go on top of the agreed day rate? or do I need to factor this in?

I just wondered as I've agreed a day rate and if I then invoice with VAT added are the client not going to kick off??

I'm sure there's a simple answer to this and I'm sorry if it is!

your question really is a non issue for agents and clients - always add vat on to agreed rate

as for LTD V umbrella

umbrella's are fine if you want to lose 10% of your income Claims of 85% net are Crazy talk

read the PCG guilds and make up your own mind

https://www.pcg.org.uk/cms/index.php...04&Itemid=1431

[northernladuk]

You do intend getting a good accountant don't you?

[Olly]

This is only available to small companies whose turnover in a 12 month period is less than £150k.

Crikey is that true? What's the definition of turnover here, is it gross invoice value (inc full 20% vat) - VAT paid to HMRC? The figure on corp tax return in the "turnover" box ?

Thanks

[Danbro]

Potential silly VAT query

Crikey is that true? What's the definition of turnover here, is it gross invoice value (inc full 20% vat) - VAT paid to HMRC? The figure on corp tax return in the "turnover" box ?

Thanks

Turnover in respect of the £150k limit is your sales income excluding VAT, i.e. what you invoice your agency / end client before charging VAT. This would be your turnover figure on your CT600 if you operated a normal VAT scheme or indeed was not registered for VAT.

Thanks
Neil

[cmscotland]

Thanks for the replies folks!