Reply to: Inland Revenue Dispensation........

Re: this thread is dead

My company offsets VAT on purchases against VAT on sales and there is a material benefit. Flat rate VAT negates that offset benefit completely. I think you may have missed the point.

If the purchases are less than the percentage of vat, which under an umbrella managed company they are likely to be(you aren't going to buy PC's for a company you don't own), then the UC could end up in profit with flat rate vat.

Re: this thread is dead

Just as well on that last one. My van is worth about ten quid.

this thread is dead

Due to the amount abuse thrown at PTV by simon & the gang it has distracted from the core issue

are "per-Diem's" subject to tax, the IR say "no"

SJD & Debbie lane say "yes", but don't describe how one discloses this to the IR.

They talk about getting "caught" in an IR inquiry.

One could run the same argument about the mileage rate. This is because the mileage rate assumes a car with a depreciable value of 5-6k, so if you run around in £300 car, you have derived and benefit because you have not incurred the depreciation expense. therefore it taxable.


but we no thats no true.:rolleyes

Re: SJD

You answered his question twice when he has been thoroughly nasty about you. I think it's only fair you give me a straight answer too. Do you have a wig, or is it just a toupee?

Re: SJD

Quote:

"Can you confirm whether or not your umbrella company benefits in any way from VAT reclaimed from expenses incurred by your umbrella company client employees"

OK, last comment on this - I have already answered this in a previous question.

No, we don't benefit in any way from the VAT on expenses incurred by our contractors.

SJD

@#%$

horray some-one who understands the mechanics of VAT.

simon admits he lets the gov't keep the VAT in on the other thread. in the general section PTV has it in for SJD

vetaren isn't simon and he doesn't understand how Vat works or he gets his expenses paid by the end client.


It a bit hard to follow as the CUK mafia have been attacking me on 2 fronts.

Re: look at the maths

Thanks for that Vetran - two things I didn't know about you : -

1) You are Simon from SJD
2) You know what you are talking about re accountancy.

I know 1) is incorrect and the verdict on 2) is dubious.

My company offsets VAT on purchases against VAT on sales and there is a material benefit. Flat rate VAT negates that offset benefit completely. I think you may have missed the point.

Please let Simon answer the original question - there are too many know it alls around here!!

Re: look at the maths

Of course the umbrella company claims the vat back if you are an employee of theirs, they charge vat to the client, the expenses are part of their operating costs and so can be claimed back. They aren't getting anything for free.

Umbrella invoices Client for £1000+ vat = £1175
£175 due to C&E

Contractor expenses cost £100 + vat = £117.50
£17.50 vat reclaimed from C&E

£157.50 still due to C&E on Vat 100.

£900 left in the pot.

So where does the umbrella company make a profit?

If they go on flat rate vat, then there may be a possible profit to be had.

Or if the umbrella is actually providing a managed company of which you are a director then they will make your managed company claim the vat back on your behalf, they can't claim it back because the expense was never theirs, the money never actually passes through the umbrella. The calculation above holds true again.

Re: look at the maths

Have to say I agree with PTV on the VAT scenario.

When I was a permi I used to claim expenses for various things and my employer was entitled to claim the VAT back on my expenses. It therefore makes sense that Umbrella Companies as the employer of the contractor are entitled to do the same thing.

Question for Simon from SJD

Are you saying that your umbrella company does not claim any VAT back from any of the expenses incurred by its contractors?
Just to make that question totally clear. Can you confirm whether or not your umbrella company benefits in any way from VAT reclaimed from expenses incurred by your umbrella company client employees?

I'm not saying there is anything wrong with this but it we would all benefit from some honesty and clarity here.

The P60 is another matter. I use an accountant and the P60 I receive each year reflects my salary for the year. I would be asking some serious questions if this were not the case.

look at the maths

" you seemed to be stating that if income received had not been declared on the P60 and/or P11D then it would never be taxable." about 2 pages back I was talking about per diems, and the legal status of P60/P11ds never "income" . I will get back to that.

Your talking about "Understating income" on a P60. I never never said that.

so please read the question. and think outside the box


so let try again employer pays you £25K(gross). got that bit!
on P60 he writes £30K. Which means he has "Overstated your income" have we got that!

On the tax side he has deducted 12k from your salary and again on the P60 he says he has only collected 9k.


this has nothing to do with tax codes!

lets try it again debs

"That assumes an employer never makes a mistake! And if they do that the income mistakenly not included on the P60 or the P11d is not taxable!!!"

Maybe we are speaking a different language. Your original statement seemed to imply that only income declared on the P60 and/or P11D was taxable and you seemed to be stating that if income received had not been declared on the P60 and/or P11D then it would never be taxable. If I misunderstood your orignal statement then so be it.

If I didn't then, I was merely trying to point out that this was not necessarily true. If an employer made an additional payment to you, a bonus for example, and forgot to include it on the P60 - this would NOT mean that the bonus income was automatically not taxable. This is only one example. There are other reasons why P60 or P11D could be incorrect (e.g. Simon's example of using the incorrect tax code).

lets try it again debs

"That assumes an employer never makes a mistake! And if they do that the income mistakenly not included on the P60 or the P11d is not taxable!!!"

Lets take the last part first
"income mistakenly not included on the P60 or the P11d is not taxable!!!"

I know there are a lot of double negatives and my grammer is crap but are you saying "income not included on a P60/P11d is not taxable" (ignore the P11dx for a minute)..... brought to you by another "real accountant"

So You have only seen it when a employer has made a mistake filling in the form? they have written 30K when he mean't 25. so its not a tax code issue like sjd cliams ?

its like pulling teeth...This issue is "not the mistake" but the "consequences of the P60," will the IR let me put 25K on my return and will they say that the amount on the p60 is what I recieved and that the end of the matter.

hopefully we get on the the understated tax payment by the end of next week.

Re: Criminal Vs civil

another one for the one with o level

Is that right?

You think you know so much about me don't you. Apparently I have an O-level. You don't know what my qualifications are.

Note the 'an'. You don't say 'with o level', you say 'with an O-level'. We only let AtW off because he's Russian.

if its not on a P60 or P11d its not income

bull sh1t

That assumes an employer never makes a mistake! And if they do that the income mistakenly not included on the P60 or the P11d is not taxable!!!

Re: Criminal Vs civil

another one for the one with o level