Originally posted by eek
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Reply to: Contracting and Flat rate VAT
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Previously on "Contracting and Flat rate VAT"
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Originally posted by jchiver View PostThanks for all the info and it would seem that most people are on the flat rate.
I guess that leads me on to my next questions which is how much in % do you keep from your day rate?
Regards,
Output VAT @ 20% = £8,000 (Added to total for purposes of calculating flat rate VAT)
Total VAT payable would be 14.5% of £48,000 = £6,960
So you get to keep £1040.
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Thanks for all the info and it would seem that most people are on the flat rate.
I guess that leads me on to my next questions which is how much in % do you keep from your day rate?
Regards,
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Originally posted by jchiver View Postdo you mean that by being on the flat rate scheme you kept £2500 back compared to what you would have given them if you were not on the flat rate?
Ta
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Not on FRS - done the maths and both are about the same for me so its easier to stay off it as I CBA to change my sage setup.
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Originally posted by MiniMani View PostQuestion: haven't signed up yet as starting out and wanted to buy a few bits. Laptop etc.
For my new contract there'll be a lot if travel. Which they have said can be claimed 'as per expenses policy'
Does that mean it is still worthwhile for me to join the FRS?
As Vectraman said you have to work it out yourself as if your travel involves driving through tolls there may be VAT on them.
HMRC has produced this that gives you a guide to the rates and links you to various booklets http://www.hmrc.gov.uk/vat/forms-rat...services.htm#6
Plus you can claim the VAT on employee subsistence - HM Revenue & Customs: Travel and subsistence: when you can reclaim VAT Though you need to be careful to ensure it's employee subsistence not client entertainment.
BTW there is legally a difference between exempt and zero rated VAT products/services.
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Originally posted by MiniMani View PostFor my new contract there'll be a lot if travel. Which they have said can be claimed 'as per expenses policy'
Does that mean it is still worthwhile for me to join the FRS?
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You have to work it out. I didn't join the FRS for my first year or so because of lots of commuting, and when I did it only saved me about £10 per month. Better than a kick in the head, but it's not going to make you rich. Of course that was when petrol was still a barmy 80p per litre; on today's prices I'd have been better off outside FRS.
Remember there's no VAT on train travel.
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Question: haven't signed up yet as starting out and wanted to buy a few bits. Laptop etc.
For my new contract there'll be a lot if travel. Which they have said can be claimed 'as per expenses policy'
Does that mean it is still worthwhile for me to join the FRS?
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Originally posted by IR35 Avoider View PostI'm in my 13th month with my current company, have had a few months of that not working for family reasons, and yet I've clocked up about £2500 profit (before Corporation tax) from flat rate scheme. Enough to pay my accountant for nearly three years. So running my company is effectively cheaper than free.
Ta
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Yes, for the typical one man band contractor I think you'd nuts to not be on the FRS.
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