VAT on daily rate?

[VectraMan]

always wondered if the umbrella was able to skim off the flat rate vat %age

An umbrella will be too big to be on the FRS, but they can make some money from expenses. E.g. You expense £117.50 for a hotel stay; they take the £117.50 out of your taxable income, so you're happy because you see the full amount being paid as an expense. But secretly they're able to reclaim the £17.50 back from the VAT man; money that has effectively come out of your pocket.

[Sausage Surprise]

Well if he's using an Umbrella as an invoicing and payroll vehicle they will do the VAT bit.

It's quite normal for a price for commercial work to be quoted without VAT.

Yep if he's got an umbrella they do all the vat - always wondered if the umbrella was able to skim off the flat rate vat %age

[TykeMerc]

Well if he's using an Umbrella as an invoicing and payroll vehicle they will do the VAT bit.

It's quite normal for a price for commercial work to be quoted without VAT.

[Scrag Meister]

You bill them £352.50 inc VAT per day.

Put the £52.50 away somewhere safe til your VAT quarter ends.

[SueEllen]

What does it means in terms of VAT? Does the client have to pay VAT on the daily rate? If yes, is that implicitly known or I need to mention this to them explicitly?

Most clients are use to dealing with contractors and other business services so are aware that the rate is exclusive of VAT.

[scooterscot]

In our world we normally quote excluding VAT but it would do no harm to make your client aware of this in your quotations.

[neebz]

I am sorry guys, I went through the guides but I still fail to understand how VAT works.


I just want to know if I am contracting directly to the client (without any agency involved) and I use an Umbrella company. And lets say I told the client I will charge £300/day.

What does it means in terms of VAT? Does the client have to pay VAT on the daily rate? If yes, is that implicitly known or I need to mention this to them explicitly?

Thanks