plus VAT?

[Wotan]

Hi, really simple question really. When agencies & hiring companies quote rates, e.g. in City jobs 500-550pd, where does the VAT come in? Are these rates VAT-exclusive or inclusive? When asked about my last rate, I always quote £X plus VAT: operating as a limited company I have no option other than to charge VAT.

Basically, I don't want to be stiffed by an agent telling me the quoted rate was VAT-inclusive. Financial companies like banks could not in the past always reclaim VAT so I'd like to know a bit more about this issue.

[Rebecca Loos]

usually rates are quoted before VAT. I would quote my rate without VAT if I were you.

[Lucifer Box]

operating as a limited company I have no option other than to charge VAT.

Whether you're a Ltd or not has nothing to do with it. Only whether you are registered for VAT or not. You're not charging VAT without being registered for VAT I hope?

[Wotan]

Oh yes, I am indeed VAT registered and strictly legit, even IR35 .

Presumably, umbrella companies are VAT registered? So for a quoted rate of £500pd, they charge the hiring company VAT on top of that, and deduct their fees and the due tax/NI from the net figure?

BTW, I hate it when people, e.g. builders, quote a cost figure to me as "plus VAT" !!!

[malvolio]

Actually they will work out the charge to the client including your bit and all the other variables and then add VAT to the total, since it is a tax on added value (the clue is in the title), which in this case is the whole delivery of your and their services.

Works backwards as well. If you are presented with a VAT inclusive invoice then get a 10% discount, you're suposed to take off the original VAT, knock off the 10% and then reapply VAT to the new total, not just knock off 10% from the original sum.

Have you not read the guides you got when you were registered? Basically, VAT does not exist as far as you are concerned, you merely pass it along the chain. That's why builders and other sole traders quote like they do - they recognise the distinction between their money and the VAT.

[Lucifer Box]

As usual, Malvolio is spot on. In any case, I disagree with Wotan and am firmly of the belief that the price of everything should be broken down into actual cost plus taxes. Governments hate this idea of course, as they are very content for the public to be unaware of the taxes they pay.