Hello, long time lurker now posting a question.
I'm running Flat Rate VAT scheme. - normally no probs.
My Latest role has been placed though a consulting company who are onsite doing PM/BA function, who to spread the total budget seen for the project from one company, has asked me to invoice direct, then pay the "finders" fee onto the consulting company. - I still end up with the same amount (well negotiated a small increase!)
So normal way of working is:
My Rate + Agent Fee = Cost to Client
I invoice agent - they add fee, invoice client.
This scenario:
My Rate + Agent Fee = Cost to Client (same as above)
I invoice client (My Rate + Agent Fee), Agent invoices my company (Agent Fee)
With FRS - this means I would be having to pay out VAT to agent, which I can't recuperate.
I have been told by a colleague you can place the "Agent Fee" invoiced part as "Negative Income" within the VAT return figures, and hence not pay the VAT on it.
So for my VAT return I would do:
Income from invoice: e.g. £100+Vat = £120
- Agent Fee e.g £10+VAT = £12
Total to declare for VAT : £120-£12 = £108
Which would be the amount I would have received in the standard way of working.
Is this correct?
Thanks
I'm running Flat Rate VAT scheme. - normally no probs.
My Latest role has been placed though a consulting company who are onsite doing PM/BA function, who to spread the total budget seen for the project from one company, has asked me to invoice direct, then pay the "finders" fee onto the consulting company. - I still end up with the same amount (well negotiated a small increase!)
So normal way of working is:
My Rate + Agent Fee = Cost to Client
I invoice agent - they add fee, invoice client.
This scenario:
My Rate + Agent Fee = Cost to Client (same as above)
I invoice client (My Rate + Agent Fee), Agent invoices my company (Agent Fee)
With FRS - this means I would be having to pay out VAT to agent, which I can't recuperate.
I have been told by a colleague you can place the "Agent Fee" invoiced part as "Negative Income" within the VAT return figures, and hence not pay the VAT on it.
So for my VAT return I would do:
Income from invoice: e.g. £100+Vat = £120
- Agent Fee e.g £10+VAT = £12
Total to declare for VAT : £120-£12 = £108
Which would be the amount I would have received in the standard way of working.
Is this correct?
Thanks
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