agency screwing me on VAT

[SueEllen]

It is if you're an Aussie.

Only works if your a Saffer now. HMRC is friendly with the Aussie taxman.

[MarillionFan]

Well everyone knows VAT-registration is just a neat way to bring in an extra 20% more money.

It is if you're an Aussie.

[d000hg]

Well everyone knows VAT-registration is just a neat way to bring in an extra 20% more money.

[TykeMerc]

only just registered as was below the threshold (and still will be for a few months),

invoices state "THE VAT SHOWN IS YOUR OUTPUT TAX DUE TO HM REVENUE AND CUSTOMS" but no VAT or deductions are shown

will speak to the accountant tomorrow and find out where i stand

It's clear that you don't understand what VAT is and that's why you feel the agency is screwing you on VAT. There are a few points you have to understand.

1. Until you register for VAT all invoices you create (from a self bill or your own system) must NOT have VAT added.
2. The agency will be VAT registered, they will invoice their clients and add VAT to the net amount. The agency will then PAY that VAT amount to HMRC less any VAT they are charged which in your case was nil. They get no actual benefit from the VAT so there's no element of you being "screwed".
3. Now you're registered for VAT all invoices from the date of registration will need VAT clearly shown however the VAT money isn't yours, it belongs to HMRC less any amount you reclaim by expenses that include VAT. You pay that to HMRC every quarter so in effect you're a tax collector. If you've gone on the Fixed Rate Scheme it's slightly different, but get your accountant to explain it.
4. You need to get your accountant to explain VAT to you as it's clear you've no idea what it means to be VAT registered.

[BolshieBastard]

only just registered as was below the threshold (and still will be for a few months),

invoices state "THE VAT SHOWN IS YOUR OUTPUT TAX DUE TO HM REVENUE AND CUSTOMS" but no VAT or deductions are shown

will speak to the accountant tomorrow and find out where i stand

There wont be any VAT on your self bill as you havent yet sent prove of VAT registration to the agent. And even if you have, they will only apply VAT once they have updated their records and apply it to your date of registration.

Your self bill will nearly always say "THE VAT SHOWN IS YOUR OUTPUT TAX DUE TO HM REVENUE AND CUSTOMS" even when you are not VAT registered. Its just a template.

[Wanderer]

only just registered

Sounds like you might be misunderstanding how the VAT system works.

[filthy1980]

WHS. Are you VAT registered?

You mention 8 months, if you were registered you would be on your third return by now.

If you have only recently registered or need to then you charge from that date, the agency has to pay vat and then you have to pay Hmrc.

only just registered as was below the threshold (and still will be for a few months),

invoices state "THE VAT SHOWN IS YOUR OUTPUT TAX DUE TO HM REVENUE AND CUSTOMS" but no VAT or deductions are shown

will speak to the accountant tomorrow and find out where i stand

[MarillionFan]

WHS.

If you're VAT registered, you have to charge VAT. If the agency haven't been paying it, tell them forthwith and they have no choice but to pay up the missing VAT.

If you're not VAT registered, you don't charge VAT, just the nett amount. What goes on between client and agent is nothing to do with you.

So either way you're not missing out. Unless the contract did specify the amount including VAT and you took it to mean the amount not including VAT, but that's not the norm.

WHS. Are you VAT registered?

You mention 8 months, if you were registered you would be on your third return by now.

If you have only recently registered or need to then you charge from that date, the agency has to pay vat and then you have to pay Hmrc.

[VectraMan]

WHS.

If you're VAT registered, you have to charge VAT. If the agency haven't been paying it, tell them forthwith and they have no choice but to pay up the missing VAT.

If you're not VAT registered, you don't charge VAT, just the nett amount. What goes on between client and agent is nothing to do with you.

So either way you're not missing out. Unless the contract did specify the amount including VAT and you took it to mean the amount not including VAT, but that's not the norm.

[CheeseSlice]

just realised i'm being screwed over by my agency on VAT,

i set my 1st ltd up on this contract, i'm 8 months in secured an extension at the end of jan,

said agency run a self bill invoice system inclusive of VAT, but it has only just dawned on me that i'll be the one paying the VAT and the agency are claiming the VAT from the client co but not having to pay it to me (my ltd)

obviously realise that this is my fook up, but is there anything i can do to lessen / reduce the impact other then:

re-negotiate contract, read the contract properly etc etc

(

Hang on, I'm confused here.

Are you VAT registered?
Does the self-billing invoice state a VAT amount?
Does your contract state that the agent and the contractor 'agree' to use self-billing?

[RobertStell]

VAT and other miscreants

So agency bill end client and add VAT ...for example £100+vat=£120

and they're only paying you £100??

am I reading this correctly?

Robert

just realised i'm being screwed over by my agency on VAT,

i set my 1st ltd up on this contract, i'm 8 months in secured an extension at the end of jan,

said agency run a self bill invoice system inclusive of VAT, but it has only just dawned on me that i'll be the one paying the VAT and the agency are claiming the VAT from the client co but not having to pay it to me (my ltd)

obviously realise that this is my fook up, but is there anything i can do to lessen / reduce the impact other then:

re-negotiate contract, read the contract properly etc etc

(

[filthy1980]

When negotiating all contracts old and new always state £xxx excluding VAT.

Not much you can do about it until extension time but it will only happen to you once...

PS. You are not being screwed by the agent on this, as the service provider it's your responsibility, it's not their fault you cocked it up.

i feel screwed that's what's important, you live and learn

cheers for the feedback

[cojak]

When negotiating all contracts old and new always state £xxx excluding VAT.

Not much you can do about it until extension time but it will only happen to you once...

PS. You are not being screwed by the agent on this, as the service provider it's your responsibility, it's not their fault you cocked it up.

[filthy1980]

just realised i'm being screwed over by my agency on VAT,

i set my 1st ltd up on this contract, i'm 8 months in secured an extension at the end of jan,

said agency run a self bill invoice system inclusive of VAT, but it has only just dawned on me that i'll be the one paying the VAT and the agency are claiming the VAT from the client co but not having to pay it to me (my ltd)

obviously realise that this is my fook up, but is there anything i can do to lessen / reduce the impact other then:

re-negotiate contract, read the contract properly etc etc

(