Reply to: VAT

[TheFaQQer]

although if you are in your first year of trade it will also be your first year of VAT registration.

Assuming that you register for VAT at the same time. You could, of course, wait until you are about to hit the VAT threshold and then register for VAT which would take your VAT anniversary to be somewhere past the end of your first year of trading.

HTH BIDI

[Jeremiah@RHJAccountants]

<pedant>You get the 1% discount in the first year of VAT registration, not your first year of trading</pedant>

although if you are in your first year of trade it will also be your first year of VAT registration.

[TheFaQQer]

Like what Claire said the VAT is nothing to do with anyone else.

Just one thing is your company in the first year of trade as because your are on the FRS you are entitled to a 1% discount so your FRS should be 13.5% this year

<pedant>You get the 1% discount in the first year of VAT registration, not your first year of trading</pedant>

[dundeedude]

Excellent - I wrote down previously that I was informed that it was normal just to add the VAT to the invoice anyway.

I do like things to be written down, to avoid future conflict. An agency may be good now, but names are just that - staff turnover can mean things change.

I shall cease worrying. Thanks.

[Jeremiah@RHJAccountants]

I've just started my contract. I asked about VAT during a contract review, to the agent, and to my accountant - was told my contract was ok.

However the wording is just:


I am registered for the flate rate VAT scheme at 14.5% - have I made a major error at the expense of VAT inclusion in the day rate?!

Term is:

"Rate: £475 per professional day." - no mention of VAT anywhere else in the contract that relates to the day rate.

Should I have included the request to have that 'excluding VAT' added to this term?

I asked this before to people and received a response that it didn't matter. Does it?

Worried now!

Like what Claire said the VAT is nothing to do with anyone else.

Just one thing is your company in the first year of trade as because your are on the FRS you are entitled to a 1% discount so your FRS should be 13.5% this year

[Clare@InTouch]

I've just started my contract. I asked about VAT during a contract review, to the agent, and to my accountant - was told my contract was ok.

However the wording is just:


I am registered for the flate rate VAT scheme at 14.5% - have I made a major error at the expense of VAT inclusion in the day rate?!

Term is:

"Rate: £475 per professional day." - no mention of VAT anywhere else in the contract that relates to the day rate.

Should I have included the request to have that 'excluding VAT' added to this term?

I asked this before to people and received a response that it didn't matter. Does it?

Worried now!

It would be normal for it to be £475 plus VAT - the agency doesn't care, they just claim it back on their VAT return so it's no gain/loss for them.

Being flat rate registered is nothing to do with anyone external, all that relates to is the VAT your company pays HMRC. It doesn't come into play anywhere else.

[dundeedude]

I've just started my contract. I asked about VAT during a contract review, to the agent, and to my accountant - was told my contract was ok.

However the wording is just:


I am registered for the flate rate VAT scheme at 14.5% - have I made a major error at the expense of VAT inclusion in the day rate?!

Term is:

"Rate: £475 per professional day." - no mention of VAT anywhere else in the contract that relates to the day rate.

Should I have included the request to have that 'excluding VAT' added to this term?

I asked this before to people and received a response that it didn't matter. Does it?

Worried now!

[Clare@InTouch]

Would they though? I'm not so sure.

IMHO i'd be the one breaking the law by issuing a VAT invoice without being VAT registered.

As NAT said, i pay bills to companies without requiring their VAT reg cert. I wonder what would happen if i sent them 5/6 of the bill pending viewing of said VAT reg cert?

I bet my ass i'd start receiving threat-o-grams asking for the outstanding amount.

Agreed - I think the agency insist on seeing the VAT certificate purely because they are trying, in their own way, to ensure you're acting legally yourself. You cannot charge VAT if you're not VAT registered, so they are making sure you are before they allow you to do so. It's not entirely unusual for contractors to be slightly confused about how to register for VAT or even whether they need to register before charging (especially if they don;t have an accountant to prompt them).

[kingcook]

Ermm, yes they can. In fact they'd be breaking the law paying VAT to a non-VAT registered person...

Would they though? I'm not so sure.

IMHO i'd be the one breaking the law by issuing a VAT invoice without being VAT registered.

As NAT said, i pay bills to companies without requiring their VAT reg cert. I wonder what would happen if i sent them 5/6 of the bill pending viewing of said VAT reg cert?

I bet my ass i'd start receiving threat-o-grams asking for the outstanding amount.

[NotAllThere]

Funny. I pay VAT to companies all the time without requiring their VAT registration certificate. That'd be a good one: next time you get the gas bill - only pay the non-VAT part, telling them they can have the rest when they've sent you their VAT registration certificate, otherwise you'd be breaking the law.

[malvolio]

I know this is the case as it has happened to me (no doubt quite a few contractors). But can they do this from a legal POV?

Ermm, yes they can. In fact they'd be breaking the law paying VAT to a non-VAT registered person...

[kingcook]

However, if you havent submitted your VAT registration to the agent, they wont pay you any VAT even if you bill it.

I know this is the case as it has happened to me (no doubt quite a few contractors). But can they do this from a legal POV?

[BolshieBastard]

I've been invoicing the agency £500 + 20% VAT = £600/day
and I've just noticed that the amount the agency has been paying into my account is £500/day and not £600

Should it be £600 ?

I always make clear before submission to client and again when accepting a role that my rate be stated on the contract as 'excluding VAT' or 'plus VAT' as appropriate.

However, if you havent submitted your VAT registration to the agent, they wont pay you any VAT even if you bill it. Alternatively, they may have just made a mistake.

[northernladuk]

Well done , you must be very proud

At least he was making sure the agent paid him correctly... oh.. hang on....

[blinko]

I do have a VAT number, it's on the invoice.

Just looked at my sent items and seen that I haven't sent the agency a copy of the VAT reg certificate

Well done , you must be very proud