Staying in the same public sector contract after April 2017

[seeourbee]

That's only if you sell your service.

Consider this, you sell your service £300 + 60 (vat) to end client.
What if you don't sell your service £0 + £0 (vat)

HMRC losing £60 in VAT, is that not right?

I see what your thinking ... assume PS would normally pay £1000 in vat to HMRC . If you then sell your service , they net that £60 so they pay £940 to HMRC and your company pays the other £60 to HMRC. Back to same net position you started with.

[eek]

Well, I don't think that's necessary as the example given is realistic and practical.

It is similar to employee working in a company. HMRC will only get ENI, NI and Tax if person is working. No income for HMRC if someone is unemployed.

Nope go and look at my first example. Then remember that most public sector departments will pay VAT out and reclaim it at the end of the month / quarter directly from HMRC... VAT unless you are selling from a shop to the general public is a zero sum game...

[MrMarkyMark]

Nope go and look at my first example. Then remember that most public sector departments will pay VAT out and reclaim it at the end of the month / quarter directly from HMRC... VAT unless you are selling from a shop to the general public is a zero sum game...

Or work in certain industries, finance, insurance etc......where the company cannot claim it back.

[northernladuk]

[5000]

Have just seen a letter e-mailed from Capita to their contractors. It talks through the changes and links to the gov.uk pages. It looked pretty good for Crapita from a quick scan. No new information. They did provide an e-mail address in case of any questions

[eek]

Or work in certain industries, finance, insurance etc......where the company cannot claim it back.

Yep I already stated that in my first reply -and as we are talking about the public sector I really don't want to repeat it again.

However I will add argue that with HMRC when it comes to IR35 and they will adopt their standard "VAT is a zero sum game" defence and ignore the argument (and probably the entire response).

[northernladuk]

Have just seen a letter e-mailed from Capita to their contractors. It talks through the changes and links to the gov.uk pages. It looked pretty good for Crapita from a quick scan. No new information. They did provide an e-mail address in case of any questions

So are they going to drop the BET requirements from their engagement process now?

[5000]

So are they going to drop the BET requirements from their engagement process now?

I know that they persisted with the BETS even after the gov website said that they should not be used. I believe they that have stopped now but it would not suprise me if some sections of Capita still asked for them.

From the letter it looks like they intend to take inside/outside direction from the public sector body

[londonlad]

Nope go and look at my first example. Then remember that most public sector departments will pay VAT out and reclaim it at the end of the month / quarter directly from HMRC... VAT unless you are selling from a shop to the general public is a zero sum game...

So if that's the case am I right in thinking?

Scenario

Public sector employed a contractor and paid £300 + £60 (vat) = £360

Contractor Paid £60 Vat to HMRC

Assuming there is nothing else for Public sector to claim back and only claim back £60 from HMRC, so the total impact is nil.

HMRC collected £60 from contractor and paid back to public sector. Impact is nil again.

Is this the case then?

[eek]

So if that's the case am I right in thinking?

Scenario

Public sector employed a contractor and paid £300 + £60 (vat) = £360

Contractor Paid £60 Vat to HMRC

Assuming there is nothing else for Public sector to claim back and only claim back £60 from HMRC, so the total impact is nil.

HMRC collected £60 from contractor and paid back to public sector. Impact is nil again.

Is this the case then?

Yep VAT in most cases is a zero sum game for us (although with flat rate until April 1st we make a slight profit from it). Everyone has paperwork relating to it but no one makes a profit from it.