VAT question

[nucastle]

Told the agent i'd bill retrospectively - she said that was fine, and that they only did it to ensure there isnt any tax avoidance going on, to protect themselves.

She did ask when i had registered though - i suppose my income is going to go above the threshold eventually so ill go ahead and get the ball rolling on it

[Denny]

But there's no reason for the agency not to be able to pay you because you're not VAT registered...

On the FRS, the amount you pay is 13% of the gross, not the net (which I didn't realise until recently). I'm planning on joining soon; I thought it'd be worth about £100pm to me, but it turns out it's more like £30pm.

Everyone gets caught out on the gross to net part. It is a bummer. Still it's still more than you'd get by not being on the FRS, so it's still worth it.

[Sockpuppet]

No just the threshold, around 60 grand turnover I think. I think you can delay it till the time you're going to exceed the threshold rather than the time you know you'll probably exceed it, which would be day one for most contractors!

Sorry should have explained better.

There is no way (other than the threshold) that people can force you to be vat registered. I was refering to the "you have to be registered for us to pay you" they are not legally liable for anything if your not etc.

[VectraMan]

But there's no reason for the agency not to be able to pay you because you're not VAT registered...

On the FRS, the amount you pay is 13% of the gross, not the net (which I didn't realise until recently). I'm planning on joining soon; I thought it'd be worth about £100pm to me, but it turns out it's more like £30pm.

[gingerjedi]

Good call ....

thing is tho (first time contract here) .. im not even going to be invoicing for VAT am i? (based on my agree'd rate and assuming i wasnt registered) ... although i guess when i register ill have to bill for rate + vat yeah?

Yes, just invoice the agency for any VAT missed once you have a VAT number, they pay you the full 17.5% of the invoice, you pay the VATman 13% (FRS) and trouser the rest... sweet.

At least that’s how it was explained to me.

[Captain Dispensable]

There is no legal reason why you have to be VAT registered. It wont even save them any money by you being registered.

No just the threshold, around 60 grand turnover I think. I think you can delay it till the time you're going to exceed the threshold rather than the time you know you'll probably exceed it, which would be day one for most contractors!

[pickle]

Tell them you've applied but are waiting for a vat number to be allocated, usually takes a good few weeks.

Curently about 3 months! I've just been through it for one of my ltds. Still, the agency shoudlnt have a problem you invoicing vat reg pending, as suggested. They come accross it all the time with new contractors.

Maybe they just want to hang on to your cash for a while....

[nucastle]

Good call ....

thing is tho (first time contract here) .. im not even going to be invoicing for VAT am i? (based on my agree'd rate and assuming i wasnt registered) ... although i guess when i register ill have to bill for rate + vat yeah?

[Sockpuppet]

There is no legal reason why you have to be VAT registered. It wont even save them any money by you being registered.

[Captain Dispensable]

Tell them you've applied but are waiting for a vat number to be allocated, usually takes a good few weeks. In the meantime you can raise invoices saying vat element to follow. Once your vat number comes through you raise an invoice for all the vat elements that you've not included on previous invoices.

Up to you how soon you actually register, bearing in mind the threshold at which you have to become vat registered.

You can make interest on HMCE's money whilst it's sat in your account between VAT quarters and there's the flat rate scheme for simplification if you're not likely to be wanting to claim lots of VAT back on equipment purchases.

[nucastle]

My first invoice will be due to be paid in only about 5.5 weeks time .... unlikely that ill get everything registered in that time?

[Hart-floot]

My agent is telling me i need to be registered for VAT or they cant pay me .... ive just set up a Ltd a few months back and had held off registering (no income to the business yet).

Is this reasonable from them?

Might be to your advantage as you can go onto the flat rate VAT scheme and get a bit of extra "revenue".

[nucastle]

My agent is telling me i need to be registered for VAT or they cant pay me .... ive just set up a Ltd a few months back and had held off registering (no income to the business yet).

Is this reasonable from them?