New to Contracting - VAT Question

[simes]

I think for most of us on here disbursements aren't something that would come up much, but from how OP describes what they do it sounded like something that might come up for them - I could be wrong!

Ah yes. I must admit, I took that to be his LtdCo set up purchases. Not for the client. But, fair play.

[TheCyclingProgrammer]

Indeed. I just didn't think the OP was anywhere near all that...

I think for most of us on here disbursements aren't something that would come up much, but from how OP describes what they do it sounded like something that might come up for them - I could be wrong!

[simes]

That depends on if it’s a disbursement or a recharge. If OP is purchasing equipment on behalf of their client (that the client then owns) it should be treated as a disbursement. In which case it’s:

Day Rate
Total
+ VAT
+ Disbursements

Recharges would be costs you incur yourself in performing the contract that the client has agreed to reimburse separately like travel, accommodation and subsistence. These can be recharged at whatever cost you agree with the client.

Indeed. I just didn't think the OP was anywhere near all that...

[mudskipper]

Just stating Networking contracting, CCNA R&S and CCNA Security Cert....working to CCNP + CCNP Sec

I've not contracted before and mostly my experience comes from full time employment, my main questions are on VAT.

Looking to form a LTD company, I'll be contracting through this but the company will have 2 other IT business interests and will be dealing directly with Residential/Corporate customers.
Will be going VAT registered immediately as I have a lot of setup equipment to buy and will need the VAT back, I was wondering about the day rates I see networking contracts advertised at.

Say the day rate is £300, if I'm VAT registered will the agency pay VAT on top of my day rate ? Obviously, if I'm VAT registered I'll need to be charging VAT on my contracting work.

Advice greatly appreciated.

By residential customers do you mean private individuals (not VAT registered)? If so, then by registering for VAT (if you don't need to) you will be 20% dearer than your non VAT registered competitors for the same money in your account.

[TheCyclingProgrammer]

Yes. And indeed on top of any expenses you incur specifically for the client, that the client will specifically reimburse you on.

Day Rate
Expenses
Total
+ VAT
Total Invoiced

That depends on if it’s a disbursement or a recharge. If OP is purchasing equipment on behalf of their client (that the client then owns) it should be treated as a disbursement. In which case it’s:

Day Rate
Total
+ VAT
+ Disbursements

Recharges would be costs you incur yourself in performing the contract that the client has agreed to reimburse separately like travel, accommodation and subsistence. These can be recharged at whatever cost you agree with the client.

[newITcontr]

If you are that new you really need an accountant and you need to speak to them. They should guide you through the start up questions. Don't worry about pestering them constantly. You are paying for it.

Don't forget to read the newbie guides to the right and trawl google. Any question you can think of in your situation will have been asked endless times. You'll learn a lot more reading up to find your answer than you will just asking us.

Got a bit of reading to do I think.

Appreciated NLUK, I don't want to fill the forum with redundant questions...

I'll get to reading the newbie stuff here, thanks to those who've answered though!

Look forward to being a part of this forum and hope to be able to contribute ...something...sometime

[northernladuk]

If you are that new you really need an accountant and you need to speak to them. They should guide you through the start up questions. Don't worry about pestering them constantly. You are paying for it.

Don't forget to read the newbie guides to the right and trawl google. Any question you can think of in your situation will have been asked endless times. You'll learn a lot more reading up to find your answer than you will just asking us.

Got a bit of reading to do I think.

[pr1]

99% will, but I would still quote "rate+VAT" in any correspondence

[simes]

Just stating Networking contracting, CCNA R&S and CCNA Security Cert....working to CCNP + CCNP Sec

I've not contracted before and mostly my experience comes from full time employment, my main questions are on VAT.

Looking to form a LTD company, I'll be contracting through this but the company will have 2 other IT business interests and will be dealing directly with Residential/Corporate customers.
Will be going VAT registered immediately as I have a lot of setup equipment to buy and will need the VAT back, I was wondering about the day rates I see networking contracts advertised at.

Say the day rate is £300, if I'm VAT registered will the agency pay VAT on top of my day rate ? Obviously, if I'm VAT registered I'll need to be charging VAT on my contracting work.

Advice greatly appreciated.

Yes. And indeed on top of any expenses you incur specifically for the client, that the client will specifically reimburse you on.

Day Rate
Expenses
Total
+ VAT
Total Invoiced

[newITcontr]

Just stating Networking contracting, CCNA R&S and CCNA Security Cert....working to CCNP + CCNP Sec

I've not contracted before and mostly my experience comes from full time employment, my main questions are on VAT.

Looking to form a LTD company, I'll be contracting through this but the company will have 2 other IT business interests and will be dealing directly with Residential/Corporate customers.
Will be going VAT registered immediately as I have a lot of setup equipment to buy and will need the VAT back, I was wondering about the day rates I see networking contracts advertised at.

Say the day rate is £300, if I'm VAT registered will the agency pay VAT on top of my day rate ? Obviously, if I'm VAT registered I'll need to be charging VAT on my contracting work.

Advice greatly appreciated.