Reply to: Vat

[Sockpuppet]

No, it means they are overpaid dumb fscks as if they were really worth that they could earn well more as contractors, hence their employers are paying over the odds for BOS.

What do ministers get piad, including BIK stuff such as a house....

CHICO!!!!!!!!

[SandyDown]

If your turnover is that low then you're not really a contractor and just a disguised employee.

What Dim means is if the declared turnover is less than 60 !!

[threaded]

Does that mean that employees on £60K salary plus per year are really contractors?

No, it means they are overpaid dumb fscks as if they were really worth that they could earn well more as contractors, hence their employers are paying over the odds for BOS.

HTH

[Denny]

If your turnover is that low then you're not really a contractor and just a disguised employee.

Does that mean that employees on £60K salary plus per year are really contractors?

[threaded]

Yes, turnover less than about £60K and you don't have to be VAT registered.

If your turnover is that low then you're not really a contractor and just a disguised employee.

[DaveB]

You're welcome

The FRS is a good idea for anyone contracting who isn't regularly subbing out work and paying large VAT'able invoices to other suppliers.

[SandyDown]

Thanks very much Dave

I need to buy a new laptop - am waiting for the Jan sales, but not intending to spend more than £2000 on it. But apart from that, don't have anything else that is required... therefore it would seems that registering for flat VAT may be quite beneficial!!

Thanks again

[DaveB]

Dave, dumb blonde question - how does the flat rate works if I claim expenses (through the invoice) the expenses will include mileage (I understand the IR now expect to show VAT petrol receipts) so my invoice should look:

1- Consulting services £xxxx
2- Expenses incurred £xxxx
Total = £1 +2

VAT = 17.5 % of total


Then every quarter I pay flat rate to IR?

Yep, that's about it. You still charge VAT to the client as per normal and pay the Flat Rate to HMRC. What you can't then do is claim back the VAT portion of business costs unless it's a capital purchase of over £2000.

So for example if you buy a new PC for less than £1000 you cant clam the VAT back on it. For over £2000 you can.

Likewise if you sub out a contract and the subbie charges VAT on their invoice to you, you can't claim back the VAT yourself, although you'd still charge VAT to the client as normal and pay the flat rate on it to HMRC.

[SandyDown]

Dave, dumb blonde question - how does the flat rate works if I claim expenses (through the invoice) the expenses will include mileage (I understand the IR now expect to show VAT petrol receipts) so my invoice should look:

1- Consulting services £xxxx
2- Expenses incurred £xxxx
Total = £1 +2

VAT = 17.5 % of total


Then every quarter I pay flat rate to IR?

[DaveB]

If you have minimal vat'able expenses it's worth registering for the Flat Rate Scheme as well. You charge VAT out at 17.5% but pay the VAT man 12% (the actual rate depending on what your business is classed as, with a 1% discount of the first 12 months from VAT registration) of the gross and keep the rest. The trade off is that you can't claim VAT on any purchases etc under £2000. Overall you should be anywhere from £600-1200 per quarter better off.

All the gory details are here :Flat Rate Scheme for small businesses .

[MarillionFan]

You pay it every quarter. It stays in your bank account and you earn money on it. If you buy a computer for £1175, you claim £175 back. So it only costs you £1000.

Kapiche.

[zamzummim]

so the way it works if I register for VAT, I claim 17.5% on my invoices, then end of the year I pay the 17.5% back to the tax office? Hence no difference to my income?

[Sockpuppet]

yes - need to be registered now, got away with it till now(worked on contracts in Europe mainly) or is there a way I can stay not registered while working in the UK?

If you're selling to businesses then add the VAT. You can claim the VAT back and they don't mind (unless they are not Vat reg) so its better to be in my eyes.

[DimPrawn]

Yes, turnover less than about £60K and you don't have to be VAT registered.

[zamzummim]

yes - need to be registered now, got away with it till now(worked on contracts in Europe mainly) or is there a way I can stay not registered while working in the UK?