Reply to: Daily Rate (plus VAT)

[ASB]

I actually have to hassle the VAT man, they hardly ever see a bill, it's like I don't exist...

When you see bills you are well and truly on the radar.

[Bluebird]

Say what happens if the VAT man never requests VAT?

they don't request - you have do declare - failure to do so in a taggable offence

[scooterscot]

I actually have to hassle the VAT man, they hardly ever see a bill, it's like I don't exist...

[Old Greg]

Say what happens if the VAT man never requests VAT?

You're allowed to keep it, but ONLY if you transfer it to a foreign account, outside the EU.

[scooterscot]

Say what happens if the VAT man never requests VAT?

[Old Greg]

Fascinatingly detailed and absolutely correct all this talk of marginal rates and recoveries may be, but it might be worth noting the OP doesn't even understand what VAT is...

We all had to learn somehow.

[malvolio]

Fascinatingly detailed and absolutely correct all this talk of marginal rates and recoveries may be, but it might be worth noting the OP doesn't even understand what VAT is...

[MrRobin]

I though you pay 13% of the £117.50 - £15.28, not of the £100. Is that correct or not?

Yes that is correct - the net difference is not 4.5% but 2.2% (or 3.4% in first year due to reduced rate of 12%)

[turbo]

I though you pay 13% of the £117.50 - £15.28, not of the £100. Is that correct or not?

That's correct.

turbo

[Old Greg]

If you register for Flat Rate Scheme then your VAT is reduced.

E.g. an IT worker can register for flat rate of 13%. So you charge 17.5% to the client, and you pay El Gordo (or El Darling now) 13%. So in your example above, your rate is £100 + £17.50 VAT, your company receives £117.50 from the client. With FRS, you only pay 13% VAT, so thats £13 to El Darling. The remaining £4.50 go into your profits.

Tete de veau!!

I though you pay 13% of the £117.50 - £15.28, not of the £100. Is that correct or not?

And the 13% is reduced to 12% in your first year of registration?

[malvolio]

The remaining £4.50 go into your profits.

And you pay 20% CT on that £4.50, so your net gain is actually £3.60...

[Pacman]

Greetings,

I have been offered a daily rate (to keep it simple) of £100 + VAT

seeing as i'm new to the game, could anyone shed any light on the 'plus VAT' aspect?

For example, does this mean that if vat was 17.5%, my daily rate would be £117.50?

I'm soon to be VAT registered and have my own Ltd company

Thanks

If you register for Flat Rate Scheme then your VAT is reduced.

E.g. an IT worker can register for flat rate of 13%. So you charge 17.5% to the client, and you pay El Gordo (or El Darling now) 13%. So in your example above, your rate is £100 + £17.50 VAT, your company receives £117.50 from the client. With FRS, you only pay 13% VAT, so thats £13 to El Darling. The remaining £4.50 go into your profits.

Tete de veau!!

[Cooperinliverp00l]

Yes.

But bear in mind that VAT money doesn't belong to you - it belongs to the VAT man, so you have to hand it over.

If you're not yet registered then you need to invoice with "VAT number pending" on the invoice and then invoice for the back VAT once you're registered.

Invoice with VAT number pending but make sure you explain to the person your invoicing what the crack is. I recently recieved my VAT number and then sent invoce off to cover the VAT that was missed from all previous ones. Cause i had already breifed the Agency that this was the route i was going down they paid up quite quickly

[thunderlizard]

I'm soon to be VAT registered and have my own Ltd company

then it's the ltd company that needs to be VAT registered, not you.

[ssrai]

ok chaps, cheers for the advicve