Reply to: Plus VAT or not plus VAT?

[tractor]

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Does explicitly stating "at the prevailing rate" really add anything? If something is stated as "+ VAT" then surely it cannot be anything other than at the prevailing rate? The rules regarding tax points for VAT are quite well defined and you have to charge whatever the official rate is. If end client is VAT registered (and not on the FRS) the actual VAT rate is surely a moot point?

Belt and braces I guess, if an agent is prepared to argue the toss over whether they 'meant' inclusive on a contract that was not explicit.

[TheCyclingProgrammer]

If you are VAT registered (or intend to be) and the contract does not mention VAT you really should demand an amendment to state rate + VAT. An addition I always add in is 'at the prevailing rate' to cover any potential change during negotiations and before first supply. May not seem like a big deal until you consider the number of times it changed recently.

Does explicitly stating "at the prevailing rate" really add anything? If something is stated as "+ VAT" then surely it cannot be anything other than at the prevailing rate? The rules regarding tax points for VAT are quite well defined and you have to charge whatever the official rate is. If end client is VAT registered (and not on the FRS) the actual VAT rate is surely a moot point?

[tractor]

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If you are VAT registered (or intend to be) and the contract does not mention VAT you really should demand an amendment to state rate + VAT. An addition I always add in is 'at the prevailing rate' to cover any potential change during negotiations and before first supply. May not seem like a big deal until you consider the number of times it changed recently.

[TheCyclingProgrammer]

I would always take rates to be quoted as ex. VAT however I would always try and ensure any contract/schedule/agreement is explicit as it saves potential hassle later on.

[Eirikur]

1. All rates are quoted as ex-vat. This is standard procedure for any B2B transaction in the UK.

Agree, but just to make sure, especially with smaller agencies or if the agent says "normally I deal only with perms", I will always confirm back £rate + 20% VAT and double check the contract.

[TheFaQQer]

1. All rates are quoted as ex-vat. This is standard procedure for any B2B transaction in the UK.
2. I personally delayed my invoices by a few weeks and then sent them all in with VAT added.

1 - only if both parties are VAT registered, or likely to be. For example, I remember a thread last year about someone who was working with a charity who were expecting the price to be gross when they thought they were talking net.

If the contract does not specify whether the rate includes VAT or not, I would expect that under contra proferentem you would win if you sued for the difference, but IANAL.

[TheFaQQer]

OK, how much do you take home?

Normally about 35% of net invoice value, but it varies. At some points, it has been 100% of net invoice value, and at others 0%.

And how someone else runs their business shouldn't really impact on how you run yours.

[jamesbrown]

OK, how much do you take home?

How long is a piece of string?

Many people will opt to build a warchest and take no more than the higher rate limit (once all income is factored). In that context, a % is meaningless.

Perhaps this is what you're after, but note the assumptions (and don't get confused by the expenses element, as YourCo ultimately pays these):

https://www.nixonwilliams.com/net_pay_calculator.asp

[prozak]

Many thanks to everyone replied. Sorry, it looks like my question was poorly worded or at least misunderstood. I think I need to split it into two:

1. If there is a contract advertised to pay £600 a day and nothing is said about VAT, does it normally mean that VAT is included into the rate or does it mean contractor will find £600+VAT in his account for each day? (once VAT registered)

2. What to do while VAT registration pending? - this one is clear.

1. All rates are quoted as ex-vat. This is standard procedure for any B2B transaction in the UK.
2. I personally delayed my invoices by a few weeks and then sent them all in with VAT added.

[Ltd]

Many thanks to everyone replied. Sorry, it looks like my question was poorly worded or at least misunderstood. I think I need to split it into two:

1. If there is a contract advertised to pay £600 a day and nothing is said about VAT, does it normally mean that VAT is included into the rate or does it mean contractor will find £600+VAT in his account for each day? (once VAT registered)

2. What to do while VAT registration pending? - this one is clear.

[Ltd]

85%?! I think you're in for a nasty surprise.

OK, how much do you take home?

[SueEllen]

Selective quotation indeed. Right/wrong, correct/incorrect are binary.

[malvolio]

I told you before, when you are in a hole, you should stop digging. You are simply proving the correctness of Tykemerc's statement below.

Selective quotation indeed. Right/wrong, correct/incorrect are binary.

Yes, but not synonymous...

[SpontaneousOrder]

85%?! I think you're in for a nasty surprise.

[tractor]

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LOL yourself. How about



Selective quotation is such fun, isn't it...

I told you before, when you are in a hole, you should stop digging. You are simply proving the correctness of Tykemerc's statement below.

Selective quotation indeed. Right/wrong, correct/incorrect are binary.