Umbrellas and VAT

[LisaContractorUmbrella]

As others have said, VAT is not an issue if you are employed by an umbrella company - for general VAT rules for working in the UK through your own Ltd Co for clients in Germany/US - this may help https://www.gov.uk/vat-how-to-work-o...ly-of-services

[TykeMerc]

As an Umbrella Company employee you can't claim any VAT related benefits, you're essentially just an employee.

[Iainfk]

Sal

Thanks for the quick reply; yes I realise VAT is not a concern as an umbrella employee, but am I missing out on a potential 'perk' (and I realise it's not quite as simple as that) of being a Ltd whereby I can register voluntarily and claim back VAT paid on services etc. ?

[sal]

You missed the fact that when using an Umbrella, you are an employee of the Umbrella and for you it's not a B2B transaction. you are not charging the Client - the Umbrella does, so VAT is not your concern.

[Iainfk]

Hi, I'm just starting to look into contracting, having been offered a 6-month contract, working in UK, for the German office of a US company (no UK site). As I understand it, if I was a Ltd, I would not need to charge VAT, (or be registered, even if value of contract is over limit?), as it's a B2B transaction outside the UK (but within the EU). I would, however, have the option to register, in order to claim back VAT paid on UK purchases, I believe. If any of that is wrong please let me know however that's not my main question:

How would that work if I went through an umbrella? Can I use their VAT registration to claim back VAT somehow? Or is this something to add to the 'Cons' column of the Ltd v Umbrella decision?

Apologies if I've missed something obvious; I couldn't find this covered anywhere on the site which made me wonder if I'd missed something.

Ta