Consulting firm refusing to pay invoice

[kempc23]

I´m trying to explain the Opeartions Director reasoning.

It strikes me you haven´t understood the general principle of VAT and why travelling expenses are an exception.

You need to talk to your Accountant again and he´ll explain it.

Having seen how argumentative you are on here with people trying to give advice I´m not surprised she dug heels in.

I AM an accountant

I think you were the one who had trouble understanding it weren't you? I'm hardly being argumentative but these are the exact same conversations I have already had. Because you aren't bright enough to understand it isn't my problem surely?

[stek]

As contractors, who generally have very low input VAT, it actually means its a bit less tax to pay which is nice. Of course it does mean you cannot reclaim input VAT on anything.

Well that's not true is it? 2k rule?

[BlasterBates]

I AM an accountant I think you were the one who had trouble understanding it weren't you? I'm hardly being argumentative but these are the exact same conversations I have already had. Because you aren't bright enough to understand it isn't my problem surely?

Yes but are you bright enough to understand someone else´s point of view and therefore reason with them, so they understand what the problem is?

[kempc23]

Well that's not true is it? 2k rule?

Forgot about that, was just trying to explain the general principle.

[kempc23]

Yes but are you bright enough to understand someone else´s point of view and therefore reason with them, so they understand what the problem is?

Not pig headed people or thick people, no.

[SueEllen]

I AM an accountant

I think you were the one who had trouble understanding it weren't you? I'm hardly being argumentative but these are the exact same conversations I have already had. Because you aren't bright enough to understand it isn't my problem surely?

Part of being in business for yourself is working out what are the effective ways of communication which will enable you to get your point across.

Sending someone in a senior company position a long email means there is a risk that it won't be read at all, or read properly even if they can understand it.

[BlasterBates]

Not pig headed people or thick people, no.

obviously not.

I can see you´re going to go far....

[contractoralan]

What the consulting firm is suggesting is quiet commonplace in the industry, as far as I understand.
if you spend,120 out of which 20 is VAT, then you re-charge only 100 because you will be reclaiming the 20 anyway from HMRC. They do the same to their customer.

If you are charging 120+24, then their cost is increasing by 20%. You are loosing money because your co is on flat rate [ and that is not their "problem" ]

As far as I understand, HMRC cannot say that you have to charge 120+VAT. That is the matter between your co and the client co. [ ie, you can agree to charge only non-vat of your expense to your client and HMRC have no say]

The Operations Director may be technically wrong, but that is how these things work in practice.

Of course, this argument does not hold good for travel expense which is not VAT-able.

If you have big money at stake, take them to court and you will definitely win - in line with what your accountant says.

But the reality is, working practices in the industry is different.

Forget it and price it into your rate in the future.

[stek]

What the consulting firm is suggesting is quiet commonplace in the industry, as far as I understand.
if you spend,120 out of which 20 is VAT, then you re-charge only 100 because you will be reclaiming the 20 anyway from HMRC. They do the same to their customer.

Except he's on fixed rate and can't claim the VAT, which is right and proper because it's 'built in' to the 14.5% deferential rate on the FR scheme. I honestly can't see what the fuss is about because of a) what I just said, and b) it's only 20 quid holding up 10k....

[kempc23]

Its not £20, its around £100. Still not a lot, but not £20. The £20 figure just relates to one invoice.