Newbie VAT question

[cojak]

Your accounting software should be able to do all that for you. I just print off 4 reports and press the VAT button (this is immediately after my 2 minute bank reconciliation, of course ).

[malvolio]

Very true. It only simplifies the VAT100 for the average IT guy. However, in other lines of business, especially those with some sort of trading, I' told it is a big help.

[xoggoth]

People always say join the flat rate scheme, it's easier, but it isn't in the end as you still have to account for invoices and expenses in the company accounts and for CT anyway.

[up_north]

Thanx Guys.

I do know what VAT is - the bit I was missing was what the agency would expect. Accountant had recommended that i join the flat rate scheme.

That was quite a tame response from Malvolio - must be a weekend thing!

Ian

[MrsGoof]

I appologise oh great one

[malvolio]

Come on, he barely knows what VAT is, let's not confuse him totally. Sounds like his accountant wil do that for him!

Although you are right - if yoo don't have a lot of reclaimable purchases (I do), flat rate is the way to go.

[MrsGoof]

read up about the Flat Rate VAT scheme

It amy just earn you a few quid

[malvolio]

The trick with VAT is to remember that it neither your money nor the client's nor the agency's, it is an added tax (the clue is in the name!). So while arbitrarily adding 17.5% to your bill looks like a bad commercial move, the client won't care because he'll in effect pass that cost on to his clients.

So the quick answer is to add VAT to your charges, so you invoice for £35.25 and at the end of the quarter send the £5.25 to the excisemen.

Make sure you read the info pack that comes with your registration, for once it is very informative.

[up_north]

...yes I have done a search but can't find anything relating to this specifically.

I have my first contract (via Progresssive who have actually been quite good so far). Got my own Ltd.

I'm advised my accountants that I should register for VAT voluntarily (won't reach the mandatory threshold). But one thing I'm not sure of is, when I'm registered, what do I charge the agency. If the agreed rate is £30 per hour - do I start charging £30+VAT (£35.25) or should the £30 now be inclusive of VAT (so I charge £25.53 + VAT). If it's the latter then surely I'll be earning less and is therefore detrimental to me registering for VAT?

Thanx all

Ian