Reply to: Job site VAT

[GillsMan]

Starting out in contracting? Go umbrella first, then go Ltd. IMO. Cba to explain why, but it's just my thoughts. I went brolly for first three months (didn't claim expenses, etc), then went Ltd. Best decision I ever made as it gave me time to concentrate on my deliverables and new non-permie mentality for the first few months, and gave me time to really learn about my responsibilities as a Limited Company Director.

[speling bee]

You're right, but you potentially underestimate OP's ability to figure that one out...

If I'm underestimating, the OP may be OK.

[captainham]

The OP should get 3 from 2.

You're right, but you potentially underestimate OP's ability to figure that one out...

[speling bee]

You also missed:

3. If you go Ltd, get an accountant; don't attempt to go it alone, you'll be lost at sea (OP specifically). But umbrellas are far easier, you may find it suits you much better...

The OP should get 3 from 2.

[captainham]

At this point I would suggest you:

1. Don't worry too much about northernladuk. as he's having a little dig at you cos you don't appear to be very well informed, so an umbrella is a safer option - but it does suck from a taxation point of view.
2. Read some beginners guides from this site, Nixon Williams, SJD Accountancy, and get back with specific questions.

A Ltd company is a serious undertaking and you need to acquire some knowledge fast.

You also missed:

3. If you go Ltd, get an accountant; don't attempt to go it alone, you'll be lost at sea (OP specifically). But umbrellas are far easier, you may find it suits you much better...

[gabox01]

At this point I would suggest you:

1. Don't worry too much about northernladuk. as he's having a little dig at you cos you don't appear to be very well informed, so an umbrella is a safer option - but it does suck from a taxation point of view.
2. Read some beginners guides from this site, Nixon Williams, SJD Accountancy, and get back with specific questions.

A Ltd company is a serious undertaking and you need to acquire some knowledge fast.

Got it Sir. Thanks!

[speling bee]

But let's say on a 400 daily rate, i have to register for VAT right?
Why should i go umbrella? I've heard it sucks from the taxation point of view.

At this point I would suggest you:

1. Don't worry too much about northernladuk. as he's having a little dig at you cos you don't appear to be very well informed, so an umbrella is a safer option - but it does suck from a taxation point of view.
2. Read some beginners guides from this site, Nixon Williams, SJD Accountancy, and get back with specific questions.

A Ltd company is a serious undertaking and you need to acquire some knowledge fast.

[gabox01]

It seriously isn't. Charging VAT also depends on whether your LTD is VAT registered as well..

Just a note, they don't pay it to you either. They pay it to your LTD (or brolly)

Go umbrella please....

But let's say on a 400 daily rate, i have to register for VAT right?
Why should i go umbrella? I've heard it sucks from the taxation point of view.

[speling bee]

I did say 99% of the the explicitly because of such areas. Academy chains of schools have nightmares when it comes to vat

Hospitals as well. In many cases (where direct and therefore not via agency) a contractor would be cheaper to the hospital if not registered for VAT (or the contractor could charge more by bumping up the ex VAT rate). Of course that's not possible for most of us because of the threshold.

[eek]

Not quite true, as the rules for certain public sector bodies reclaiming VAT are complex. No relevant to OP though.

I did say 99% of the the explicitly because of such areas. Academy chains of schools have nightmares when it comes to vat

[speling bee]

Business to Business transactions are usually priced excluding VAT as 99% of the time VAT is irrelevant to them....

So the rate should be ex (or +) VAT

Not quite true, as the rules for certain public sector bodies reclaiming VAT are complex. No relevant to OP though.

[speling bee]

And you mean this is not site specific, but rather a convention in UK?
I seriously thought, that VAT is included in the daily rates shown around job sites.

It's a convention. However, when you get your contract, one thing to review is to make sure that it states £500 + VAT (which it should).

[northernladuk]

And you mean this is not site specific, but rather a convention in UK?
I seriously thought, that VAT is included in the daily rates shown around job sites.

It seriously isn't. Charging VAT also depends on whether your LTD is VAT registered as well..

Just a note, they don't pay it to you either. They pay it to your LTD (or brolly)

Go umbrella please....

[gabox01]

They pay £500+ vat

And you mean this is not site specific, but rather a convention in UK?
I seriously thought, that VAT is included in the daily rates shown around job sites.

[northernladuk]

I'm a bit confused now, so let's take a concrete example:

Job: Development Team Lead / Architect (Java/JEE) - Technojobs

Does that mean, that they pay 500 + VAT to me, or they pay 500, and i have to pay the VAT from that 500?

<sigh>