Reply to: VAT on expenses charged to Agent

[TheFaQQer]

Is it the Easter bunny?

If it means the end to this thread, then yes.

[ctdctd]

RESULT:-)

Composed a nice email and they are paying the missing VAT by BACS's today

No need for the baseball bat then:-(

[hugebrain]

Thud...thud...thud...

Ultimately someone pays VAT. It's not you, it's not your supplier and it's not necessarily your client. Who it is I leave as an exercise for the reader (hint#2: the answer has already been posted).

Is it the Easter bunny?

[malvolio]

So to summarize what you are saying:

I don't pay any VAT.

My customer doesn't pay any VAT.

Their customers don't pay any VAT.

It's just an elaborate purposeless scheme for the customer to send me some money which I send to the government and the government sends back to the customer.

The government doesn't make any money out of it and it's just a way for us to pass the time and an excuse for getting people off the dole and into government non-jobs in the VAT office?

It's possible I suppose.

Thud...thud...thud...

It's a tax on added value (hint#1: that's why it's called VAT). You have paid VAT on things you have bought, but you get it back again when you sell something. You charge it to people you sell your stuff to by adding it to your invoiced value.

Ultimately someone pays VAT. It's not you, it's not your supplier and it's not necessarily your client. Who it is I leave as an exercise for the reader (hint#2: the answer has already been posted).

[hugebrain]

Seriously CBA. You can't argue with a vacuum...

So to summarize what you are saying:

I don't pay any VAT.

My customer doesn't pay any VAT.

Their customers don't pay any VAT.

It's just an elaborate purposeless scheme for the customer to send me some money which I send to the government and the government sends back to the customer.

The government doesn't make any money out of it and it's just a way for us to pass the time and an excuse for getting people off the dole and into government non-jobs in the VAT office?

It's possible I suppose.

[malvolio]

Oh man...your name...this post...irony.


...snip...


/me waits for malvolio to come and wipe the floor with you

Seriously CBA. You can't argue with a vacuum...

[Sockpuppet]

You are completely wrong.

Consider a transaction: I do some work for a customer who pays me 100,000.
Without tax He is down 100,000 and I am up 100,000.

In a sensible world, that would be the end of it.

Instead, say the customer still pays 100,000 and I only get 50,000. The government extorts the rest from us. Now it makes no difference whether they call it corporation tax, VAT, income tax, NI, eco-tax or whatever, they've still got half our money. It makes no difference whether they say the customer pays it or they say I pay it, they still have the money.

Obviously, all the money you get from the client is "merely money you've collected from your clients". Doesn't stop VAT being a tax you pay.

What the government take in tax is money from your pocket, whatever gullible people might think about "someone else" paying it. There is no someone else, just you and the customer (and taxing you or taxing the customer is the same thing). If it makes it easier, imagine a bag of money changing hands, the customer puts in 100K. The government could steal from it while it's in your customers hands, or wait and steal from while it's in your hands - makes no difference if you open it up and there's only 50K left inside.

Oh man...your name...this post...irony.

All of what you charge should be ex VAT. End of. Ever wondered why b-2-b websites have prices listed ex VAT and those b-2-c are inc VAT?

You collect VAT for the govt. it is never, ever part of your money. You should not think about vat when quoting for work or when talking about turnover.

If I bill Coy A £100,000

They receive an invoice for £117,500

They pay £117,500

If they are vat reg the £17,500 that I collected from them to give to the govt they get back by putting a vat return in.

So the govt in a b-2-b transaction makes no money from the vat. Everything charged is claimed back (or should be).

The govt never takes VAT from your pocket as VAT should never make it into your pocket.

I bet your the kind of person who quotes daily rates as inc vat.

Simple answer: collect vat, seperate into seperate account, pay to govt as requested. Then you never see it as part of your bank balance.



/me waits for malvolio to come and wipe the floor with you

[hugebrain]

Which bit of "The money you are sending HMRC is merely money you've collected from your clients" did you not understand?

The only person to pay VAT is the end consumer of the final product, or to be more precise, the first non-VAT-registered component in the chain. Everyone else is merely adding it up and passing it on.

You are completely wrong.

Consider a transaction: I do some work for a customer who pays me 100,000.
Without tax He is down 100,000 and I am up 100,000.

In a sensible world, that would be the end of it.

Instead, say the customer still pays 100,000 and I only get 50,000. The government extorts the rest from us. Now it makes no difference whether they call it corporation tax, VAT, income tax, NI, eco-tax or whatever, they've still got half our money. It makes no difference whether they say the customer pays it or they say I pay it, they still have the money.

Obviously, all the money you get from the client is "merely money you've collected from your clients". Doesn't stop VAT being a tax you pay.

What the government take in tax is money from your pocket, whatever gullible people might think about "someone else" paying it. There is no someone else, just you and the customer (and taxing you or taxing the customer is the same thing). If it makes it easier, imagine a bag of money changing hands, the customer puts in 100K. The government could steal from it while it's in your customers hands, or wait and steal from while it's in your hands - makes no difference if you open it up and there's only 50K left inside.

[malvolio]

Where do they get it from? You seem to think it doesn't come from you (despite mailing the cheque), the above posters seem to think it doesn't come from your customer either. Either it comes from the Easter bunny or you guys must be mistaken.

Which bit of "The money you are sending HMRC is merely money you've collected from your clients" did you not understand?

The only person to pay VAT is the end consumer of the final product, or to be more precise, the first non-VAT-registered component in the chain. Everyone else is merely adding it up and passing it on.

[hugebrain]

VAT is money that is the governments.

Where do they get it from? You seem to think it doesn't come from you (despite mailing the cheque), the above posters seem to think it doesn't come from your customer either. Either it comes from the Easter bunny or you guys must be mistaken.

[BA to the Stars]

Thanks Dave, I thought that was the case but it is nice to get that reassurance

[DaveB]

Mal

As a slight side issue, if you are on the Flat Rate Scheme, does the difference between the 17.5% collected and the actual amount submitted to HMRC following the calculation of the VAT due form part of the turnover? I stand to be corrected.

Yes it does and counts towards profits for CT purposes.

[TheFaQQer]

Whose money was it? (I bet it was the Easter bunny again!).

VAT is money that is the governments.

[hugebrain]

It isn't costing you money - it was never your money in the first place!

Whose money was it? (I bet it was the Easter bunny again!).

[BA to the Stars]

Mal

As a slight side issue, if you are on the Flat Rate Scheme, does the difference between the 17.5% collected and the actual amount submitted to HMRC following the calculation of the VAT due form part of the turnover? I stand to be corrected.