Should I go VAT eegistered?

[northernladuk]

Ive searched, and searched again, and maybe one of you will point out I didnt search enough, but I cannot see a thread in relation to this query.

Something like this?

https://www.google.co.uk/search?q=va...ntractoruk.com

[mudskipper]

I think OP is imagining that the VAT will come out of his daily rate.

It doesn't - you add it on.

So if you're on £300 a day, yourCo invoices for £300 + 20% VAT = £360. (The agent claims back the £60, so it doesn't cost him anything)

YourCo then give the vat man 14.5% of the £360 = £52.20. So yourCo keeps the extra £7.80 per day (which is then subject to corp tax)

Note that in your first year you get a 1% discount, so you're even better off!

[Testing123]

I think OP is imagining that the VAT will come out of his daily rate.

It doesn't - you add it on.

So if you're on £300 a day, yourCo invoices for £300 + 20% VAT = £360. (The agent claims back the £60, so it doesn't cost him anything)

YourCo then give the vat man 14.5% of the £360 = £52.20. So yourCo keeps the extra £7.80 per day (which is then subject to corp tax)

Note that in your first year you get a 1% discount, so you're even better off!

Hi All

thanks for the responses, not sure why I didn't get any notifications.

coincidentally, I met an IT contractor who is also an accountant at a friends and family gathering this weekend, so reassured me my accountant had set me up in the correct manner, and explained things clearly.

Mudskipper - thanks for the clear answer, much appreciated.