ir35 in private sector

[malvolio]

I've not worked in banking but I've heard that sometimes the contract will be between agency and a VAT registered, wholly owned subsidiary (or something along those lines) so that they can claim as much VAT as possible.

There will be other industries where they can't claim the VAT back and can't loophole it though.

Since VAT is a tax on added value to a commodity through a service (the clue is in the name), why is that a problem? It is our work that creates a VAT liability and ultimately, income to the Exchequer. If we're comparing apples with apples, all generated taxes have to be included. Someone has to pay the ultimate difference between input and output VAT, even if it's quite a way down the line, so in revenue terms it is not tax neutral at all.

[DeludedKitten]

Since VAT is a tax on added value to a commodity through a service (the clue is in the name), why is that a problem?

I didn't say it was a problem.

It is our work that creates a VAT liability and ultimately, income to the Exchequer. If we're comparing apples with apples, all generated taxes have to be included. Someone has to pay the ultimate difference between input and output VAT, even if it's quite a way down the line, so in revenue terms it is not tax neutral at all.

I provide my services to a blue chip client to improve their processes. I charge them VAT. They reclaim the VAT. There is nobody to pass this onto. It is neutral.

As I have said a number of times now, including something in your argument that is easy to rebut makes it easy to discount your entire argument. If your circumstances mean that VAT isn't neutral (and I'd think that many roles for people here are not VAT revenue neutral) then include it in the argument. But repeatedly saying "I add £30k a year in VAT" when that is entirely reclaimed and isn't passed on to anyone down the line (even way down the line) means that anyone who understands VAT can point that out, pick one hole, and then use that to extrapolate and ignore any valid points you are making.

[malvolio]

I didn't say it was a problem.



I provide my services to a blue chip client to improve their processes. I charge them VAT. They reclaim the VAT. There is nobody to pass this onto. It is neutral.

No it's not. That cost appears somewhere in the consumer chain, even if it's via a retailer recovering his costs of doing banking, which costs will include a margin for non-reclaimable VAT costs, and recovering his input VAT from his customer.

As I have said a number of times now, including something in your argument that is easy to rebut makes it easy to discount your entire argument. If your circumstances mean that VAT isn't neutral (and I'd think that many roles for people here are not VAT revenue neutral) then include it in the argument. But repeatedly saying "I add £30k a year in VAT" when that is entirely reclaimed and isn't passed on to anyone down the line (even way down the line) means that anyone who understands VAT can point that out, pick one hole, and then use that to extrapolate and ignore any valid points you are making.

I understand VAT. I was in accountancy when it was implemented, and it hasn't really changed since. If VAT were cost neutral it wouldn't work.

HTH. BIDI.

[madame SasGuru]

Since VAT is a tax on added value to a commodity through a service (the clue is in the name), why is that a problem? It is our work that creates a VAT liability and ultimately, income to the Exchequer. If we're comparing apples with apples, all generated taxes have to be included. Someone has to pay the ultimate difference between input and output VAT, even if it's quite a way down the line, so in revenue terms it is not tax neutral at all.

Why do these threads always end up talking about VAT multiple times?

2 points
1) HMRC consider VAT revenue neutral in our situation. Yes there are exceptions (note the NHS tax avoidance issues last week) but they are (quite) minor exceptions.
2) HMRC have a habit of ignoring statements once they've identified things that are wrong. Hence if you talk about VAT in a consultation response they could ignore the other arguments due to the part of it being inaccurate (to their eyes)...

Oh and this is a done deal - for those who haven't retired yet how are you planning to escape the replaceable bum on seat market...

[DeludedKitten]

If all VAT were cost neutral it wouldn't work.

FTFY.

HTH. BIDi.

[madame SasGuru]

No it's not. That cost appears somewhere in the consumer chain, even if it's via a retailer recovering his costs of doing banking, which costs will include a margin for non-reclaimable VAT costs, and recovering his input VAT from his customer.



I understand VAT. I was in accountancy when it was implemented, and it hasn't really changed since. If VAT were cost neutral it wouldn't work.

HTH. BIDI.

And yet you miss the wrong argument invalidates your entire response statement 2 people here are making....