Do Umbrella companies benefit from collecting VAT?

[LisaContractorUmbrella]

Well you're a cheery bunch on here today What you have to bear in mind is that there are costs to an umbrella company that are associated with checking and processing expenses; these will be lost in April (assuming nothing changes between now and then) and therefore the loss from VAT on mileage will be absorbed leaving profits as they are.

[LondonManc]

Well you're a cheery bunch on here today What you have to bear in mind is that there are costs to an umbrella company that are associated with checking and processing expenses; these will be lost in April (assuming nothing changes between now and then) and therefore the loss from VAT on mileage will be absorbed leaving profits as they are.

What a very cheery way of saying you'll be laying people off

[SimonMac]

What a very cheery way of saying I'm alright jack but the intern is fecked

FTFY

[LisaContractorUmbrella]

What a very cheery way of saying you'll be laying people off

I confess that we will be a couple of computers lighter and the lawyers will definitely get less work but the staff will be ok

[TheFaQQer]

Well you're a cheery bunch on here today What you have to bear in mind is that there are costs to an umbrella company that are associated with checking and processing expenses; these will be lost in April (assuming nothing changes between now and then) and therefore the loss from VAT on mileage will be absorbed leaving profits as they are.

Surely there will still be expenses to check and process, though? And if you've got to go through the SDC rigmarole then that's more work - or are you just going to deny all expenses?

[LisaContractorUmbrella]

Surely there will still be expenses to check and process, though? And if you've got to go through the SDC rigmarole then that's more work - or are you just going to deny all expenses?

Even if we were to go through the SDC rigmarole (which following email exchanges with HMRC is becoming a bigger rigmarole than ever!!) we couldn't process tax relief at source anyway so things will just go back to the way they were about 15 years ago

[DallasDad]

Thanks for the insight Lisa
I really was just genuinely curious, I had naturally assumed there would be something in it similar to FRS for you guys simply because you are processing VAT on behalf of HMRC.

@TheFaQQer
Those figures are quite an eye opener!

So although off my original topic, lets assume these losses mount up and some go under or merge with others will the the remainder have to increase their margins?
Will Accountants then do the same because the rates are currently very competitive with each other

If so then the loss of T&S is bad for all of us whether we can still claim it or not.

[LisaContractorUmbrella]

Thanks for the insight Lisa
I really was just genuinely curious, I had naturally assumed there would be something in it similar to FRS for you guys simply because you are processing VAT on behalf of HMRC.

@TheFaQQer
Those figures are quite an eye opener!

So although off my original topic, lets assume these losses mount up and some go under or merge with others will the the remainder have to increase their margins?
Will Accountants then do the same because the rates are currently very competitive with each other

If so then the loss of T&S is bad for all of us whether we can still claim it or not.

Very difficult question to answer. Firstly, nothing has been finalised so, until the middle of this month, any kind of prediction is just speculation. HMRC's whole reasoning behind this legislation was to create a 'level playing field' and yet they have actually made things far less level than they were in the first place which leads me to think that they haven't quite finished.