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Previously on "Prime contractor fee (subcontractor found the job but wants to use my SW license)"
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Thanks Lance and oilboil! Good point: definitely the VAT side needs to be taken into account and the increase in Accountant costs.. So the fee must be in form of a percentage. Luckily, I have time to investigate it all as the client is taking their time...
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Originally posted by Lance View Postyou need to be really careful with VAT for foreign customers. I don't know much about it but I know enough that I would double check for each country.
Until Jan 1st the UK/EU VAT rules were clear. But now they are not. So good luck with that if you have EU clients.
It could be costly if you get this wrong.
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Originally posted by DerekDuvall View PostYou're right. I was out of VAT scope until now so I wasn't thinking about many things. Still, shouldn't pose a problem as the customers are mostly foreign businesses.
I think I'll go ahead with the deal, I just need to figure out how much to charge...
Until Jan 1st the UK/EU VAT rules were clear. But now they are not. So good luck with that if you have EU clients.
It could be costly if you get this wrong.
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Originally posted by Lance View PostWhy wouldn’t you charge VAT to a business?
It’s not an optional thing. You still charge it, but they, if registered, can claim it back.
I think I'll go ahead with the deal, I just need to figure out how much to charge...
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Why wouldn’t you charge VAT to a business?
It’s not an optional thing. You still charge it, but they, if registered, can claim it back.
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Parapraxis
Originally posted by Lance View PostDoubling revenue will have no affect on tax, other than VAT.
Your company is taxed on profit.
Insurance might go up, but you need to check your policy to see.
Not being funny or owt, but why are you afraid of business success?
Your last question - probably very valid in a Freudian sense
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Prime contractor fee (subcontractor found the job but wants to use my SW license)
Originally posted by DerekDuvall View Post
What I'm afraid of is how doubling up my revenues might affect me negatively in terms of insurance costs or tax benefits.
Your company is taxed on profit.
Insurance might go up, but you need to check your policy to see.
Not being funny or owt, but why are you afraid of business success?
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Originally posted by cojak View PostYes, you could find yourself with problems, I remember a similar situation where a contractor was being used just for his certification/software licence- it was not to the contractor’s benefit.
I’ll see if I can find the thread, but in the meantime someone with more knowledge than I might post here.
I sense there might be things there working against me. I double checked my contract with the software provider and this seems kosher and I've also informed them about the whole thing and I'm waiting for their position on this. They are usually rational and don't stand in way of implementations. Two things they are keen on are non-compete in terms of SW, and using licenses to do work which isn't implementation or consulting. It is industrial software and if I would lend my license to a producing company I would be in big problems, if I'm implementing it or doing a live test it is OK.
What I'm afraid of is how doubling up my revenues might affect me negatively in terms of insurance costs or tax benefits.
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Yes, you could find yourself with problems, I remember a similar situation where a contractor was being used just for his certification/software licence- it was not to the contractor’s benefit.
I’ll see if I can find the thread, but in the meantime someone with more knowledge than I might post here.
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Prime contractor fee (subcontractor found the job but wants to use my SW license)
Greetings!
Apologies in advance: English is not my first language.
I am in a peculiar situation where an independent consultant has asked me to act as a prime contractor for him. I have an LTD and he just wants to start solo work after decades of being either an employee or a consultant doing implementations for a big name company. He has personal connections which can land him a job with a large client. However there is a certain requirement on the client side. If they want to get all corporate approvals for hiring an external company or individual to do something they need that external company to be a certified implementation service provider of the software company which provides them with the system on which the work will be carried out.
Here I come into the picture - I already have such status and I am paying an annual fee for the software license and I spent a few months getting the status sorted.
So in the end the situation would look like this: my company would be hired by the client and I would then hire the subcontractor to actually carry out the work. Consultant/subcontractor-to-be indicated already that he is happy with me taking some commission. He knows people at the software provider but doesn't seem to be interested in attempting to get the ISP status (it is a bit of a headache and there is the annual fee). I also contacted them and got a green light for this.
My questions to everyone here who hopefully understood what I wrote down and who have more insight/experience:
1) Is there anything that I'm not seeing here? Could I get myself into more trouble than I now see?
2) I know it's my commercial decision at the end of the day, but what would be your ideas on fair commission that could work well for both parties? The situation would be clearer if I was just doing simple admin or if I actually found the work for him.
If this works out well we might turn it into a mode of operation for the two of us and I'm happy to build a profile for him on my website and similar.
Many thanks to everyone!Tags: None
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